From the blog I found and liked, I happened upon this link:

Now I’ve only been using it for about three days, but it’s nice to see how much of each payment goes to interest in a nice little column.  A few months back my federal loan servicer changes. Now as a background, I had switched to income-based repayment, then very shortly thereafter moved to a place where I don’t have to pay rent.  As a result, I continued to pay the non-income based amount, so even though it showed $0 due every month, I was always paying about $500 each month.  When my servicer changed, I had some issues.  First, I got a few emails about the fact that my servicer was changing and I didn’t have to do anything, they would contact me when the switch was all made.  I set up a log-in anyway, and thought it was odd when a while later they still hadn’t contacted me, so I logged in.  It says my $900+ payment from last month is late, and another is due this month.  Now I know I was paying an income-based amount for a month or so, and that this means more interest is accruing than I’m paying, so when I get off income based the payment might be slightly higher…but not to the tune of $400. I call them and try to figure this out and they’re completely useless.  They tell me I can request income based payment if I need to, but generally they don’t know anything.  Whatever, I pay the $1,800 before even talking to them, because I’ve been working extremely hard at building my credit and the last thing I need is for “late” payments to ruin that for me.  Looks like I’ll just have to spend less on nonsense, but the extra $400 a month isn’t something I can’t handle.

Lo and behold, a month or two ago I log in to pay, and I only owe $400 or so that month.  I didn’t request income-based, so what’s going on? Turns out, under my old servicer, I was on 20 or 30 year repayment, because my total debt was (way) over $30,000.  And when the new servicer took over, they decided to just wait a few months, and bill me an extra $1000 during that time, before putting me on the plan I should have been on.  Now because I don’t pay rent and have a decent income I was able to deal with it, but many other people in my debt-paying situation would not have.

But now that the background is done, we get to the moral of the story.  I can pay the $450 or so that is due every month, and when I look at my fancy put-everything-in-one-place excel sheet I see that $426 of that is going towards interest.  So in my $450 payment, I’m making a $24 dent into my principal.  NO THANK YOU.  So while I have the plan of throwing extra money at my debts in a specified order, I’m instead paying the $925ish that would be due if I was on 10 year repayment for these two (payment combined) loans.  I also make rounded up payments to each loan payment, so I’m not technically throwing all my money at my debt in my predetermined order, but hopefully I’ll start seeing small dents to go with the big ones.

Screen Shot 2013-09-28 at 8.49.03 AM

(This screenshot took me way too much effort–and is still way smaller than I would like.)

On another note, My mom got me a Starbucks card.  We’ll see just how long I can make it last. I’m hoping that with the $25 I added to my card myself yesterday I won’t have to add any more in October (and maybe even a little into November? Wishful thinking?)




3 thoughts on “Interest-ing

  1. Hey – I know this is an old post, but I’ve been to the vertex site and actually already use one of their spreadsheets…. however, can you tell me which one it is you’re using to calculate how much of your payment is going to principal and how much to interest? In searching the site I didn’t see one that would do this. I’d love to know the name of the one you’re using!

    Also, it sounds like you’re really heading in a great direction! We have a lot of debt, too, so it’s nice to see another PF blogger out there who’s got a significant amount of student loan debt like us.

    • I think it’s this one:

      You may have to unhide some columns to see the amount that goes towards interest. For most of my loans, when I break out interest and principal on Mint, I use the amounts in my “recent payments” if they give the breakdown. I think the amount of interest in your payment can vary a lot (at least on $70k worth of loans) depending one when in the month you pay it (and when you made your last payment), but I think the sheet should be pretty accurate if you’re paying at the same time each month.

      Thanks for reading–new post or old, I’m just glad I’m not talking to myself!

      • Thanks! I haven’t seen anyone break down their student loan payments into principal vs. interest, and I think we will start doing that once we have our consumer debt paid off (hopefully by the fall). At that point, when we’re actually able to pay more than the minimums, it won’t be so terrifying to look at how long we’ll be paying and how MUCH INTEREST we will be paying. For now, I’ve already downloaded the spreadsheet and will force myself to just save it until we’re ready to throw more money at those loans! Thanks!

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