Paying off a large student loan balance always seems to come with the understanding that you’ve got to put your life on hold for years until you’re done with your debt.
For Mary Grace Stocker, part of what makes her debt success story so inspiring isn’t only the fact that she’s on track to fully pay off $21,000 by her birthday next March. It’s her embracing of technology that’s allowed her to pay her loans ahead of time and still afford to do the things she loves.
How has she managed this for the past three years without going broke? After starting a job post-graduation for a financial startup, Stocker has used an assortment of online tools and apps (including our own prepayment calculator) to hone her budget and loan repayments while still having enough discretionary income to save and spend.
“Distracted by life”
Stocker aimed to graduate early from college to avoid more student loans than she needed. After earning her degree in December 2013 as an art major with a focus in graphic design, Stocker moved to Colorado and landed her first job, where she dove right into hacking away at her loan balance.
A trio of loans, all financed through Nelnet at a 6.55% APR, brought her total loan balance to $21,000. Paying more than she owed was her original goal, but fronting $1,000 each month became difficult on a $30,000 starter salary.
“That was kind of tough because it was a big portion,” she says.
Initially, Stocker was able to put a dent in her student loan interest to prevent it from accruing beyond belief, freeing up money towards paying off her principal balance. But then, she got set off course a bit.
An avid outdoors enthusiast, climber, hiker, and skier, she shifted her focus to buying gear and paying for trips and excursions. Though this didn’t put her into more debt, it meant that she wouldn’t pay off her loans early, as intended.
“I always wanted to pay it off,” Stocker says. “I just got distracted by life.”
By last fall, Stocker felt she had stretched her finances too thin. After a Yosemite climbing trip, she realized that she didn’t have enough money to reimburse her boyfriend, who’d paid for the excursion.
Though she’d been paying the minimum on her student loans, she had little awareness to her day-to-day finances. She also had zero emergency fund or cash reserves of any kind. “I felt really all over the place and not responsible,” she recalls.
Her first step was downloading the tried-and-true Mint app, setting up a budget, and syncing her bank accounts to monitor all her monthly expenses, including student loans, rent, utilities, car payment, gym membership, and other recurring bills.
Looking for another app to use in tandem with Mint, Stocker contacted the folks over at Dobot; its app, MyDobot, hadn’t launched yet, and she reached out to their representatives to inquire about it to manage her finances.
Impressed with her enthusiasm, Dobot offered Stocker a job as a product manager at the growing startup. The opportunity dovetailed perfectly with her foray into using money apps; now, she was promoting an app that she began using personally to start saving money.
Using apps like MyDobot and Mint was the moment Stocker’s finances began to fall into place, allowing her to see exactly how and where her finances were coming and going. Now, she could divide up her accounts, determine a budget, and see how to cut back in one area to free up money in another.
Since she had the specifics of her finances laid out in front of her, she could use it as a baseline to pay off her loans, build an emergency fund, and save money for discretionary purchases without being in the dark about her money.
The key piece, according to Stocker, is to treat saving money as a fixed expense, paying yourself each month as you would pay a bill from a creditor.
“Now I’m working at Dobot and thinking about goals,” Stocker explains. “Once you set a goal, you’re more likely to achieve it, especially when you have details.”
Outlining and mapping those goals became simple. The biggest and most important? An early student loan payoff.
Stocker set a deadline of March 2017 — her 25th birthday — to be completely student loan-free as a present to herself. But she also wanted to continue to her passion for outdoor adventures, and according to her calculations on Mint, her current financial state wouldn’t allow any leeway.
So, the time came to refinance her loans.
This past July, Stocker secured a new 5-year consolidated loan with CommonBond, refinancing all three of her unsubsidized federal loans with the lender at a reduced interest rate of 4.88%. Her new balance of $16,783 shaved off several thousand dollars from her original balance.
“It made it easier to mentally pay them all off together,” she says. “The snowball effect [paying down debt from smallest to largest] wasn’t so appealing. I wanted to lower the rate and have it all together.”
Climbing to the top
At the time of this writing, Stocker has $12,551 left on her student loan balance. Thanks to her usage of financial apps, she was able to configure the exact amount she owed — right down to the very dollar — and set a payoff date.
With Mint, she could budget for her student loans and other expenses to reach goals. Her status so far:
- She’s built up $5,000 in emergency cash
- She took on a side hustle babysitting, helping her average $1,600 in monthly student loan payments
- CommonBond awarded her a $500 credit that she also paid towards her loans
- For her efforts, Stocker’s parents gifted her with $1,000 towards her loans
Working with the Dobot app allows her to automatically set aside cash for “fun money,” pursuing her passions without dipping into other finances — something that may slip up other people without a clear-cut money plan in place.
For instance, she reserved a special climbing fund saved out of sight to avoid temptation. It recently afforded her $450 in new gear without the need to dip into her emergency fund.
It’s not all on the apps, though; Stocker is a strong advocate of monitoring her credit now that she’s got a hold on her student loans and finances.
“When I was getting more organized, I was checking my credit score almost every day,” she said. “It’s kind of like part of my daily money check-in.” Her current FICO score’s been increasing regularly as her loan balance quickly decreases.
For Stocker, taking advantage of mobile apps (and working for one) was the motivator she needed to find transparency with her finances and fit them into her life.
That doesn’t mean there aren’t concessions or sacrifices. “It gets tougher because you have to say no to going out,” she says. “But it’ll be worth it when you’re debt-free, for sure.”
As her student loan debt gets smaller and smaller, Stocker says her biggest inspiration in life is “living free.” Living free of debt, however, means first living a life of intent and focus on your finances.
“If you actually want to use something, you need to keep it in sight,” she says. “Not obsessively, but be focused — because if you get distracted, you’ll lose the focus.”
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.47% – 6.71%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|