Thursday, December 17, 2009

Student Loan Surprise x2

Last Friday I took the day off to use some of my use it or loose it time. I missed my early December net worth calculations (time just got away from me) and decided to catch up. I logged into all of the accounts, plugging balances into Excel and noting the progress we've made. The mortgage was looking good. The Prius is pretty close to our year end goal. Then I logged into my student loan account.

A while back I wrote about getting my interest rate reduced .25% by setting up auto debit payments. Each month I make sure that a few days ahead of the 3rd (my payment day) the cash is in my ING checking account. Each month the funds get pulled out without incident. Until December. On the 3rd the funds were happily sitting there. I scheduled some transfers for other things on the 4th and moved on with my life.

You see where this is going right?

The student loan people didn't pull things until the 4th. At a low moment in the transfers (there were multiple in and out) the student loan people try to get their money. But it wasn't not there. At this point I abandon updating the spreadsheet and get on the phone.

While holding for an agent and then holding for her supervisor (when talking to me about my money you can't sound like my 15 yr old cousin) I poked around on their site. Then I found surprise #2- the happy surprise. After 24 on time payments my interest rate will fall 1%. I don't have to ask or do anything. I just start saving money.

I was worried that surprise 1 would jeopardize surprise 2. That night I paid the amount due ($88 instead of the $315.99 we usually pay), and a $15 insufficient funds fee. Tuesday the page online with the info about the interest rate dropping move from 20 to 21 on time payments. I think they're one of those places where you're on time within 15 days of the due date. Not that I'll be taking advantage again.

The final bit of student loan news comes from 2 extra payments. Above I mentioned the monthly payment vs the amount due. Right before I started this extra payment thing my mom sent in an extra payment for my birthday or something. As an aside, I love that she knows paying off debts is so important to me and will send funds to debt instead of sending my something I don't need. Back to the student loan- the company that manages my loan is one of those irritating places where if you want to make an extra principal payment you have to include a note and mail it to a special address. Mom didn't do this so each month they collect more than they need and sit it in a 'bucket' until there's a full payment and then forward the date.

I think the 'bucket' thing is bs, so I only paid them what was due and sent the rest as an extra principal payment. They actually got 2 checks because earlier in the week I wrote out a check to kill my 4th loan. Loans 1-3 have balances in the $7,000-8,000 range. Loan 4 has a balance of $270. Though it shouldn't, loan 4 really really bugs me. Earlier in the fall during a financial talk I said I wanted to pay off this little loan because it bugs me. My husband shook head at my crazy but said he was fine with it.

So we should start the new year with the student loan $500 lighter and by the end of the first quarter the interst should be lower.

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