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Sent In My Very Last Student Loan Payment!!

Student Loan Balance: Paid Off!



I got my very first student loan in 1996 and accumulated more all the way through medical school – 6/2005. I borrowed a total of $130,000 which went up to $150,000 after accumulation of interest. I still only paid the minimum payment for the first few years not realizing the principal was going up.

In 2010 I finally started paying a little extra every month. If I had a small windfall I would send the money towards student loans. But it wasn’t until 2013 when I realized that every time I was paying minimum payments my principal was going up — obvious to some but shocking to me.

On 5/1/2015 I decided I needed to get rid of these loans. I started out with a balance of $72,185 and paid around $8,600 every month towards the loans. My interest rate was only 2.75% but I was accruing nearly $4 every day. At that time I wasn’t spending $4 even on coffee… I sure wasn’t gonna pay it to no student loan company.

After $1,022 in interest payments (and the $72k of principal payments, of course) I have reached my goals! My student loans are completely paid off. It’s a great feeling, better than I thought it would be. If you are in a position to put investing on hold and just focus on paying off your student loans then do so.

Now, it’s not like you will completely stop investing/saving. You hopefully have your emergency fund and you are likely maxing out your 401(k). So you can still invest a little AND aggressively pay down your student loans.

What my previous financial advisers recommended:

“Don’t pay off the loan, the interest is too low, refinance it and stretch it as long as you can, only pay the minimum on it.”

What my best friend advised me:

“What are you crazy?! Pay it off, pay if off now even if you have to live out of your car. Even a dollar a day in interest is money you are losing.”

2 replies on “Sent In My Very Last Student Loan Payment!!”

I sure hope you fired that advisor. I too can’t understand why someone would ever recommend you carry debt for as long as possible. That’s just crazy! Let me be the first to say congratulations and now your free to invest and build wealth. A job well done!

Thank you! I figure the ‘math’ may make sense at times. For example, inflation is at 3% and your loans at 2%… well, not paying it off might make sense. But inflation has been quite low for one thing and more importantly paying off debt is just so liberating… math that out!!

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