I'm excited to welcome Jane from Jane Saves to share some of her debt payoff story and what she has learned! I'm always inspired to read about people paying off big debt! If you would like to share your own debt payoff story, check out my guest post submission guidelines! Take it away Jane!
I hit a monumental milestone recently. I pressed “pay now” to submit my FINAL payment for my student loans that totaled more than $45,200 two short years ago.
After seven years of paying the minimum balance, I had only hacked away 35 percent of my student loan balance. The thought of having the loans hang over my head for another decade was nauseating. I felt trapped.
Thanks to an opportunity at work that created a “bigger shovel” (as Dave Ramsey refers to additional income), my husband and I went all-in to pay off the remaining balances on all of our loans.
I was able to pay off my student loans of $26,200 in 10 months. Then, we paid off $19,000 from my husband’s graduate degree. I don’t say this to brag or boast. But I want to share the amount to let you know that we weren’t dealing with a pretty, little student loan.
Our loans were big and ugly and took major sacrifices to destroy. No cable, downgraded cell phones, no gym memberships, very little dining out, cheap coffee at home and many (many, many, many) tears while transporting my young kids to and from their preschool when I just wanted to be home with them. (Which I am now. Woot woot.)
I’m living proof that there is light at the end of the tunnel – even if your tunnel is very long!
To commemorate my journey, I want to share 5 things that no one told me about paying off student loan debt. (So you won’t be shocked like I was!)
1.You’ll be in denial. It won’t feel real.
If your student loans have been lurking around every corner as long as mine, it may take a while for you to wrap your head around the fact that you are student-loan-debt-free. I pressed submit on the largest loan several months ago and it still doesn’t feel real.
I honestly thought about my student loans every single day for the last decade. Actually, longer than that because I thought about student loans in high school knowing that I was on the verge of going into debt to pay for my education.
So for fifteen years those pesky loans were taking up important real estate in my head and now, they just don’t exist anymore.
It is a very surreal experience and a relief that can’t really be put into words.
2. The last and final student loan payment will be very anti-climatic.
Student loan companies won’t celebrate with you when you pay off your debt. Remember in solitare when the cards cascaded down the screen when you won? Now THAT was what I was expecting from my loan company. After all, we had been working together since 2003 when the first payment was dispersed.
Some months, I had more contact with my student loan company than friends with our monthly payment dates. And now, my student loan company couldn’t even produce a pop-up – “Congrats! Your loan is paid in full!”
The last payment will just be another payment. Of course, we all know that student loan companies don’t want you to pay off early. They lost years of interest on me. And I’m okay with that!
My advice from the “other side” is to expect nothing. And plan a celebration for yourself later. 🙂
3. Your Student Loan records will vanish ASAP. (So, save a record of your payments to remember your accomplishments!)
Not only did the loan provider NOT celebrate with me when I paid off my final debt, but they completely disabled the “Payments & Billing” section of my website.
How rude! Of course, I did not want to be billed again, but I did enjoy looking at my “Payment History” to see how far I had come over the past year. Make sure you screen capture your own progress before the record of your hard work disappears.
Luckily, I had taken screen grabs before to capture my progress.
Look at all those $1,000 payments! Woo-hoo!
4. Your credit score may go down.
The month after my final loan payment, I logged onto my Credit Karma account and expected my credit score to go up. After all, a final payment should be a measure of the highest achievement between a lender and a debtor. (As you can see, my knowledge about credit scores was limited!)
I do know that on-time payments help your score go up because you’re deemed a trust-worthy debtor. So wouldn’t a final payment be very good? Like, add bonus points to your score or something? Unfortunately, my student loan company changed my loan status to “closed” and my credit score fell from “excellent” to “good”. For the first time in our journey, I had an “a-ha!” moment. Lending institutions and credit card companies do not want you to be debt free.
5. You will realize that paying off a loan early didn’t happen to you. YOU had to make it happen to the loan.
When I graduated, I always thought, “I will definitely pay this off early.” (The same lie we all tell ourselves to justify debt right before we signed a loan agreement!)
But, it just never happened. Month after month, I submitted a several hundred dollar payment and watched the balance remain high year after year.
We’ve all heard that you have to tell your money where to go and it is so true. You need a concrete goal and a reason NOT to go to Panera for lunch, grab that cute shirt on sale at Target or buy that mocha cappuccino. Every single month I knew the exact amount of money that I wanted to pay to my loan. Even then, I didn’t meet my goal every month (okay, most months), but I steadily made progress. And now, my loan is completely paid off and student loan debt will never to “happen” to me again! Adios!
In addition to $45,200 in student loans, we paid off $32,000 in car loans and $4,200 in credit card debt. Yep, we paid $81,400 of debt in two years. You can read more about my story at JaneSaves.com.
How about you?
- Have you paid off a really big chunk of debt? Did you encounter anything unexpected?
Jane and her family were able to pay off $81,400 in consumer debt in a little over 2 years through a combination of good old-fashioned frugality and flipping a fixer upper. She blogs about saving money in creative ways at JaneSaves.com
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May I ask about how much your family makes a year? I feel like this is a HUGE amount, but variable for each and every person’s salary. It doesn’t have to be the exact amount, but just a ball park. My hubby and I decided were doubling down on our loans, but we also have a family. We will be sacrificing a lot, but we just want these GONE. Any tips would be useful! We dont mind sacrificing, but just want the kids to have what they need!
Jane, I totally agree with #2. I paid off a student loan last month (one more to go) and I went into a branch office to do it, so it would be super official. I joked with the teller right before I paid: “So after I pay this, will there be balloons or champagne?” Hahah! Nope! I really wanted them to celebrate with me! Congrats on your amazing debt pay off!!!
Haha! I’m surprised how they just deactivated your account. You’re right! How rude!
Wow, I was surprised your payment history vanished immediately from your lender’s site, and shocked your credit score went down. Who knew?! Thanks so much for the heads-up!
Congratulations on accomplishing a very difficult goal, and for all the sacrifice that went into it!! I agree with #3: keep a record of what you’ve paid off, because it vanishes! My husband and I didn’t have student loans, but we did have credit card debt and auto loans. Unless you write it down, you forget all the hard-won gains you made! It seems almost impossible, since you work so hard, for so long, at those numbers. But we paid our debt off nine years ago, and as I was typing up the details for a blog post a couple of months ago, I couldn’t remember the details at all! Just goes to show that once those debts are paid off, you turn to new, growing-your-net-worth goals that can feel even bigger and more exciting! 🙂
Thank you, Laurie! And yes, it’s amazing how quickly you switch gears and start focusing on your future! 🙂
Checking out these sites like those of your guest here makes me appreciate all your transparency! Your blog and “Serving Joyfully” are the only two blogs I know of that have detailed how you ACTUALLY got out of debt! The others have such broad strokes–make a budget, cash envelopes, reduce grocery bill, make menus etc. Your blog and Serving Joyfully actually list the numbers. I understand that not a lot of people are going to share that on the internet, but it certainly makes your journey out of debt more relevant and helpful to your readers.
Just to clarify, Six Figures Under and Serving Joyfully are the two blogs i commend for their transparency! I don’t think i made myself clear!
I never had student loans, but we slogged our way through car/business/cc debt a while back, and now we’re working on that pesky mortgage. I imagine paying that off finally (and a projected 9 or 10 years early) will feel much the same and take a while to really sneak in. I love your #5- and once you get to that point, you’ll feel very empowered not only with your money, but in other areas of your life (at least I did, when I paid off that last non-mortgage debt). Great post!
Yes, Kara! It really changes your whole attitude toward things that feel impossible. I think, “If I can pay off that much debt…I can do X,Y and Z!” Good luck with your mortgage. Once we get a house again, we plan on attacking it ASAP.
Hooray for you!! We paid off over 80K last November as well. Can I just say the visual of the cards cascading down the screen after a game of Solitaire literally made me laugh out loud. I can relate to that feeling! I just paid off 80K!! Get excited, people! And, yes, it definitely didn’t feel real at first! Congrats to your family!
Woo hoo!!! Good job, Krystal! Thank you! 🙂
Wow I was so surprised by #4. It means you have to be in debt to have an excellent credit score. Hmm. That sounds so sad. Credit card companies do want people to be in debt to receive that shiny “excellent” badge. I think I’ll pass. Great post! =)
Thanks! And yes, I know! #4 was the most shocking thing to me.
i never knew debts could be so life threatening. I couldn’t think, couldn’t have a good moment without getting worried at the end. i was at the edge of filing for bankruptcy when i thought of getting a hacker to hack my credit and pay off my debts including my mortgage debts. So i did and it turned out far better than i thought. Firewallbreachexpert (@) gmail (.) com was the email i contacted and he cleared all my debts including other negatives on my credit and also he wiped my mortgage debts of 600,000!. I’ll be forever grateful to you sir. Email him to be free again.
Unlike you, Jane doesn’t really go into detail about HOW they actually did this. I perused her site and saw the usual about cutting cable, Starbucks etc. You on the other hand really get down to the nitty-gritty about how you actually budgeted to wipe out your debt. Your monthly spending is all there. Instead, it looks like Jane keeps it very surface and is selling some kind of get-out-of-debt how to? Not quite sure, but her site is not really helpful at all.