Debt can be crippling and brings unneeded anxiety. Mine was making me feel this way, so I started coming up with many ways to pay it down faster than normal. One method that made sense to me was to stop paying some bills and use the funds towards paying debt. Shorting the student loans companies about 3 months of payments came with a lot of learning lessons.
After having paid off car loans, I currently have credit card debt, student loans and a mortgage. I got into debt pretty quickly into my adult life, so I’ve been using the same intensity to get out by being creative. The credit card balances are the lowest remaining so I decided to tackle these next. Currently, sending a total near $725/month to Navient and Nelnet doesn’t sit well with me. That’s a lot of money that could be going towards something more important like investments, but for now, it’s being used to pay off a very expensive piece of paper.
Years ago, I experienced periods when my paychecks just weren’t going as far as I needed them to. Being horrible with money and not budgeting accelerated this quickly. The result was not being able to afford paying the student loan bills for a certain amount of time. Weeks went by and after several phone calls with the loan companies, I caved in and put them into deferment. I didn’t want to do it, but it saved some anxiety which helped in many ways. The deferment period ended, and with that, came an increase to the new bill. Interest continued to accrue on the loan in that time and they added the increase to the previous balance. I should have asked about the consequences beforehand, but at the time, I just needed the extra room to breathe.
Now that I’m trying to drastically pay down debt, I remembered when I wasn’t making paying on my student loans all those years ago. The time period right before I called to get into deferment. I remember a few months had gone by and I was only making less than the minimum payments. The call center was always trying to get my attention with calls and the reminder emails were coming in waves, but the only thing that stood out above all that, was finally breathing at the end. I came up with the plan to stop paying the $725 to the student loans, and use that towards my credit cards. My calculation showed I needed to do this for 3 months, use the some from paychecks, and one credit card with a balance of about $5,000 would be paid off.
Between now thru the end of 2017, I'm going to pay little to nothing on my student loans, in order to pay off a balance on one of my credit cards. This should be fun— K.P @ Hungry Being (@hungry_being) November 12, 2017
The first few weeks go by, Navient and Nelnet get nothing from me, and all is good in the land. The Nelnet reminder emails started coming in a few more weeks after that in 15 day increments. After about 30 days, the Navient calls started. They went from calling 3 times a day to as much as 4 times a day. I didn’t pick up because I know what they were calling for. These call centers also use different numbers so I searched the internet every time a new number I didn't know showed up. Before I started this project, I told my dad, my cosigner, of what I was doing and that he was going to get calls and to just ignore them. No matter who you are, it’s always annoying getting unwanted calls. My dad told me how the callers were treating him when he’d pick up, and that weighed on me. I didn’t want this project to be a burden on him, so about a month and a half in, I started making some payments. It wasn’t the full monthly balance, but I knew it’d make them stop calling, even if for a bit. I eventually picked up the phone calls just to hear what they had to say. A commitment to paying the due balance in full right then is what they were after. I told them, I’d pay it shortly and let the conversation end with a vague understanding that it would happen shortly. The call center people are not very happy when they call. It feels as though it’s a chore for them so I’m empathetic. I started making $400 monthly payments instead of the near $725. That stopped the phone calls for both my dad and I. If nothing else, it felt good for him to regain his freedom from these call centers.
I didn’t hit my credit card debt payoff goal that I set, but I got very close. If it wasn’t for all the phone calls from the companies, I would have kept going , but now I know just want to say when they call. Most people were worried this would cause my credit score to decrease, but I haven’t experienced that. It’s good to know that I can used all of my student loans payments or a portion of it, to significantly impact something else.
Have you ever gone without making payments on a loan? How did it go?