Big personal finance milestone

A few weeks ago I accomplished a big personal milestone. Paid off one of my many (which will soon be few as soon as my consolidation application goes through) loans.

The loan amount was for $8000.
It only cost me $608.39.
$232.30 in interest and $376.09 in fees.
I began paying the loan on 22 June 2007.
I made the final payment on 7 June 2008.
This loan took me 351 days to pay off. [thanks to calculate days between dates]

Because I aggressively paid off this loan I was able to save a lot of money in interest charges.
If you want to pay off your loans this quick and cheap I suggest you order my book, which details the specific plan in order for you to do this...

I'm just kidding, information should be free. Here is what I did and how I did it:
  • Made a payment. Much of that payment went to pay off the interest. Some of that went to the principle of the loan.

  • Immediately made a second payment specifically towards the principle.

  • Do this each month until you can pay off the loan with one final payment.

The purpose of the second payment was to deduct from the principle without having to pay interest charges. Say my first payment was $100. Of that $100 $25 of it went to interest. So, in reality I only deducted $75 from my loan. If I were to pay an additional $75 in a separate payment I could realistically, pay off the loan in half the time it would take me if I did not make the second payment. It isn't like I'm making a $200 payment, only a $175 payment. But that $75 is very very valuable to me. That extra $75 gave me some quicker peace of mind.

I mentioned a similar method towards paying off your mortgage in half the time. I plan on using this strategy again on the remainder of my student loans. I'll post later on the specifics of that process.


Anj said...

Yay! That's wonderful :)

Anonymous said...

Congrat's! keep up the good work! MY

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