Credit Debt Finances & Money

Check is in the Mail: Stacie’s Student Loan is Paid Off!

7 days ago, I told you we were in the homestretch of paying off Stacie’s student loan, and today we finally did it!

We had enough money in the checking account to pay the last $970 on the loan, but I don’t like bringing the balance down below $1000 (don’t ask because I don’t have a reason why). So I waited until I got paid today to send the last online billpay for Stacie’s undergraduate student loan. That’s over $10,000 paid off in the last 6 weeks! You’ll want to click through that link above to see how we did it, or keep reading below.

NOTE: Make sure you turn off any automatic bill payments when you pay off a loan! I almost forgot and a payment was set to go out tomorrow. I would have sent them an extra $150 and probably waited a few weeks to get it back.

So what’s next?

So we have 3 remaining debts other than our mortgage, and they all belong to me:

  1. About $19,000 left on my Honda Ridgeline truck loan (4.5% interest)
  2. About $11,000 left on my student loan (deferred, but 6.5% interest otherwise)
  3. About $4,000 left on the tuition in charged on my Discover Business Card (0% until December)

So the question now is which debt to we pay off next? Well, it’s not as easy as saying “the truck dummy!” because although my consolidated student loan is deferred now, I don’t expect it to stay deferred through the summer as I’ll be down to just 3 credits. Also, I’ll be charging another $2600 onto the credit card within the next month or two to pay for that summer class. I have room on the card, but I’ll need to tackle it eventually (at least before I owe another $5200 in late August for the fall semester).

So for now I haven’t made a decision. The student loan is within reach of paying off before summer ends (maybe), whereas the truck will have to wait until year-end at the earliest, but most likely early next year). Then again, I’ve been considering selling the truck, but I’ll get into that at another time.

Oh, and we’ll be spending a couple thousand this year on home renovations (new flooring, 3 retaining walls, remodeled upstairs) and I’d also like to add more money to our savings and investments. There’s only so much money to go around!

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Clever Dude


  • Well done on paying off the loan – I cannot believe you did it so quickly – I must go and read your past posts and find out how you did it. Remember the feeling of paying it off – especially if you are tempted to make purchases that you do not really need.

  • Hey Clever Dude,

    I have a suggestion for how you should tackle your debt. Try a debt snowball. It worked for the guy at Get Rich Slowly and it has worked for thousands and thousands of people that listen to Dave Ramsey (crazy guy on the radio).

    I highly recommend selling that truck and getting something reasonable. You can get a very nice, safe, and functional car for around $7,000 (or less). Even if you owe more on the truck than it is worth, you could sell it and finance the difference, then buy a $7,000 car. Lets say you still owed $2,000 on the truck after you sold it, now you have reduced your car debt from almost $20,000 to less than $10,000.

  • @Tye, good advice. I’m aware of the debt snowball, which is why I’m only tackling one debt at a time. I wrote about it in January 2007.

    As for getting rid of the truck, it’s hard to do when you like the vehicle and it’s very versatile. However, it wasn’t until this summer that I’m actually using its hauling capabilities more. In the 2 years of owning it, I’ve only used it for something a car couldn’t do about 6 times (mostly hauling furniture or mulch). However, it’s a big price for an infrequent convenience. I already have a post drafted about the truck, but I need to think about it more. Thanks for the comment!

  • Congrats! I like to keep my options open so I’d probably stuff the money into a savings account until I made a decision. I would also call the card and see if you can have the limit for the 0% raised. You should be able to work out the numbers since you know your income, upcoming tuition and the rate the 0% card goes to after December. I suspect the card is going to have a huge rate compared to everything else.

    So I would figure out what you’ll owe then, and how much you can put toward debt each month, and work backwards. For example, if your total on the card will be $6600 when it goes off of 0% in december, and you know you can put 2200 a month towards debt, I’d pay something else until October, and then pay everything towards the card in oct, nov and dec. You could also put it in a savings account until Dec if you’re able to resist temptation.

    Do the same with the student loans coming off of deferment, though you may want to check on the deferrment. I know in undergrad if you’re full time in spring and fall, you don’t have to be full time in the summer to stay deferred. I don’t know how it works with grad classes.

  • If you don’t use the truck for its hauling capabilities that often, then it might make sense to sell it and rent a truck or van whenever you need it. You would probably pay for those 3 rentals per year in fuel savings alone.

    By the way, I drive a huge vehicle too (Chevy Tahoe – 150,000+ miles), and I LOVE the convenience of it, so I can understand where you are coming from. But, since it is currently paid off, I am just going to stick with it until I am forced to buy a new (used) car.

    Congrats on paying off the student loan, clever dude, you’re headed in the right direction! You’ll be debt free before you know it. Then you’ll just be wealthy!

  • I think I’m a similar situation as far as student loans and car debt. I have very little to pay on my car and over $80k left on the student loans – I might have to bookmark this post for those days when I think that making extra $100 payments are really getting me there any faster.
    And re: your truck post – I can’t wait to see it. I’m in the middle of deciding how long I should wait to get my next car.

  • FYI: never get a Student Loan.
    Only Teachers Benefit with their Forgiveness Loans,
    and they still want more pay…
    FYI: never get a Car Loan
    Deductions are not worth the cost.

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