So adulthood is full of fun little ‘problems’ that could be better.
I’m going to share a recent hack YOU NEED if you pay on your student loans more than you have to make them go away. Cause it’s a sneaky little thing that computers won’t do for you until you tell them to.
This little guy is math.
ALL YOU FUCKERS WHO SAY YOU DON’T USE ALGEBRA ARE SPECIAL and WRONG.
Okay, off the soapbox. This is probably more personal information than I really want to give but … it makes sense of the math.
Your student loans will default to even amounts of payback even if they are different amounts and different rates.
I had the fun of going to school from 2009-2014 and the rates changed three times.
Which doesn’t leave all the amounts that get paid to interest as the same and some funky math and priorities.
I was looking at the extra amounts that I was paying in 2016 and not seeing any results. I didn’t realize that my loans weren’t going down because of the interest I was paying on each part. It was all different amounts and yes, I was passing the minimum amount and that does help my credit.
But it wasn’t making the principal go down as far as I thought it should.
So I figured out what the percentages of interest they were generating because I wanted to pay less in interest than I was at the principal. Because that is how you make debt GO AWAY.
I don’t like it hanging over me. I know there are better ways to make it go away faster that take a lot more work and yeah… the method I currently use probably annoys the computer at the loan company because I pay weekly instead of monthly AND THIER DUMB payment system will not let me autopay multiple times in a month so I go in and schedule them once a month.
I have two chunks of loans, but I’m showing you the more complicated one because it demonstrates my point better about how #algebra is your friend. The other one is an easy 60/40 split cause it was the same year and time frame.
So it subsets into 5 ‘loans’ one roughly 7k, 2k, 5k, 5k, and 2k.
They have 3 different interest rates which doesn’t go into figuring out which one to pay more unless I’ve got halves of percentages which the system didn’t like.
Starting off, the 7k has 6.8% interest and therefore gets the most percentage because it currently takes $9in interest every month compared to the total of $20 ($20.29. I’m rounding). So 9/20 =
All right, now we repeat.
Next up is strangely the 2k because it also has a 6.8% stupid interest rate (that could have been a lot worse but it’s still on the high end). Total interest paid every month is still $20 until I make more payments.
But 2.5 /20 = 12.5%. The system doesn’t like decimal points and so it rounds down.
Keep going with the numbers and you get something that goes from paying 2/3 of every month’s payments towards interest to getting more money towards principal. Which means that you’re accumulating less interest over time.
It’s a finesse system that you can set, usually and then you just have to stick to your default (instead of theirs because it might pay the highest interest first, but that doesn’t mean that’s the one gaining the most interest because amounts also come into play).
So slowly but surely my weekly deposit of 42.50 pays only $20 in interest instead of the $30 I was paying back in January before I caught this little bug.
So, in consequence, don’t trust computers to do everything for you because you didn’t write the code to control them and make sure that you save every penny by spending five minutes doing Math. Just take the amount you’re paying in interest divided by the total and that’s your percent.
It’s super easy and your phone calculator can do it without turning on the scientific side of it.
NOTE: I didn’t take the total amounts of each ‘loan’ into consideration until I had to decide which one rounds down versus up. That was so that way it’ll add up to 100% without going into decimal percentages.