Pay Off Creditors Giving You Problems

Disclaimer:  I’m not a certified financial planner, nor am I your attorney.  I’m just a person in baby step 2 working on paying down debt and giving you some tips that have helped me, many of which have come straight from the horse’s (Dave Ramsey’s) mouth. 

My husband borrowed around $12,000 to go to paramedic school over a decade ago, several years before we ever met.  His was a private student loan, and for some reason I honestly still don’t understand, his Navy enlistment not long afterward didn’t pay it.  So we’ve been stuck with it for our entire marriage, making $100-ish payments each month.  We didn’t even apply for a forbearance or a deferment when we had zero income for six months in 2013 because the monthly payment was just so low.  But because the payment is so low, this debt has stuck around forever.  We should not have allowed it to do so.  But we can’t change the past, right?  We can, however, change our future.

When my husband was in the military and deployed, his interest rate on this particular loan was about 6%, not great, but not too bad for a student loan either.  However, given our current economy and rising loan interest rates, that rate has been steadily increasing.  The rate increased about half a percent between summer 2016 and summer 2017, then one and a half percent between summer 2017 and summer 2018.  The rate is currently nearing 8%.  We were due to receive a notice at the end of this quarter (September 30th) letting us know the rate had increased again.

I’ve grown to intensely dislike the company that services this loan, partially because of the frequent interest increases but also because the company frequently reduces our direct debits based on the additional $15 we’ve been throwing at this loan each month.  (Originally our payments were $125 per month, but have migrated their way down to $108, so I frequently have to change the additional amount paid toward the loan to keep that balance reducing as quickly as possible.)  But as Proverbs 22:7 tells us, the borrower is slave to the lender.  So instead of complaining to a huge lender not likely to care, we decided to focus on the loan and pay it off.

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