$23k Debt-Free

August 2016: Debt-Free Break Down

Loan: $Total debt – $Monthly payment = $Total balance

Personal Loan: $2,979.78 – $2,979.78 = PAID OFF!!

Credit Card: $9,728.84 – $195.00 = $9,533.84

Student Loan: $10,468.41  – $111.18 = $10,352.09

Total debt balance = $19,885.93

Finally able to pay off the Personal Loan this month. I know the plan was to pay at least $1,000 or half of the balance, but Joel and I have decided to just it all off at once since we have enough in savings to cover the expenses before pay day again. What a great way to start the month of August I would have to say 🙂 With the Personal Loan out of the way, we are able to save $333.00 from our monthly budget. That $333.00 can be put toward the Credit Card that we currently still have to pay, which can help us pay it off sooner. We shall see.

It seems like Joel’s last student loan is a nightmare! It’s been almost 10 years since he started paying it and it barely moved. After checking where the monthly payment were going to, the Interest were taking majority of it (Average 60-80%) and not much are going to Principal.

PLAN A: Pay off the Credit Card debt first and if the Student Loan allows credit card payment, we will pay the Student Loan in full using our NFCU credit card. This will allow us to avoid dealing with the “Interest thief” from the Student Loan >:| We don’t mind paying $200-300/monthly on minimum payment for our credit card because at least we know that majority of it will be bringing down our balance rather than the interest.

PLAN B:Our next plan is to either try and pay as much as possible for the Credit Card debt (or at least bring the balance down to $3,000) and maybe take out another Personal Loan to pay it off. But what we learned this year is that Personal Loan’s minimum payment are usually high and so are the interests.

PLAN C: Focus on paying off the Credit Card debt first, save $2,000-$3,000 on the side while Joel takes another ship out job. Take out $7,000 Personal Loan and combine that with the money we saved on the side, pay off the Student Loan. At least this way, we can start paying back the $7,000 Personal Loan back as soon as possible.

PLAN D: Focus on dealing with the Student Loan first. Continue paying the minimum for the NFCU like we always do. If our bank will allow us to take out another personal loan with our current debt situation right now, we plan to take out $8,000 (ask for maybe 5 years to pay back the loan if available, just to give us time) and save $2,000 on the side this year. Prior to Joel getting onto another job contract, we will apply for the $8,000 loan and pay off the entire Student Loan. By the end of this year, hopefully our Credit Card could be brought down by $1,000 giving us $8,500 debt balance. As soon as Joel starts a new work contract, we can put most of our focus on the Credit Card.

We are soooo close yet so far away! We got this!


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