which strategy would you use

[adventure]

Sounds like you're planning for FIRE, not just hoping!

[DMFA]

...not bad! Cheers. Now kill the debt beast :-)

Sometimes I complicate things to show how simple they are. Complexity is just simplicity in series (or parallel?).

[Hatton]

I am glad you made a decision because this thread was getting too complicated!

[HopingForFIRE]

To follow up with everyone, I stopped analyzing it so much and put it on my discover card for a 1% fee zero interest for 10 months. I've since moved the extra cash flow to my solo 401k (75% funded now) and increasing my emergency fund which admittedly I had neglected a bit to max out loan payments and retirement funds.

Thanks all. Now on to other questions.

[DMFA]

HopingForFIRE wrote:

It’s a daily accrued interest but I hear you. I’ll stop worrying about it and just pay them off a little slower. I appreciate everyone’s response and now that I’m reading my post. I think my original choices were probably me being myopic.

Click to expand...

Daily accrual, but it doesn't capitalize/compound. That just means it's (.04/365)*30 (or 28, or 31) instead of .04/12; minuscule difference. Excel's =cumipmt function will give you a markedly similar number.

Even at continuous compounding, , P[(n+1)/2] * (e^[.04/12] - 1) = $166.94, a whole $0.27 worth of interest over the prior calculation over four months (assuming you pay accrued interest plus $5,000).

Long story, um, long: you can do whatever you want; you're still fine. If you can flip the debt with CC payments for points and then pay off the CC, that's free money, but I don't think Mohela (SoFi's student loan servicer) allows CC payments.

[hightower]

You've done a killer job getting so far.  But sounds like you're sick of throwing money at debt.  I was in a similar situation earlier this year when I still had about 28k of high interest loans to finish paying off. I wanted to start contributing to a taxable brokerage account immediately at that point and was sick of making huge payments to Navient. So I just paid off the remainder of my navient loans with two credit cards through Plastiq. I put them on a zero interest introductory credit card from Chase and another one from Citi and paid a 1 time 2.5% fee for doing it.  That fee was easily covered by the Chase Sapphire card benefits I also signed up for at the same time.  So, now I have 21 months to pay off that last $28k interest and fee free and I've been able to immediately start saving money in a taxable account.  I look at it as a free loan for 21 months.  I'm still forced to make minimum payments on the balance of course but eventually I'll have enough in my taxable account that if I get sick of dealing with the card balances I can just pay them off immediately.  Or I could just transfer them to another zero percent interest card at the end of the 21 months if I want.  I've seen several cards that have free transfer offers and interest free for 12-18 months.  Its a minor thing for sure, but its nice to hold on to my own money for as long as possible while earning interest in a taxable account.

[HopingForFIRE]

Also I like that phrase. Sounds so cushiony.

[HopingForFIRE]

It's a daily accrued interest but I hear you. I'll stop worrying about it and just pay them off a little slower. I appreciate everyone's response and now that I'm reading my post. I think my original choices were probably me being myopic.

[DMFA]

Hold up, math check.

Assuming you pay accrued interest each period and then equal parts of the principal...let's use four and twelve months.

I = (r / 12) * (1 + [n-1]/n + [n-2]/n + ... + 1/n)p

I = (r / 12) * ([n+1]/2)p

I = (.04/12) * ([4+1]/2) * 20,000 = .00333 * 2.5 * 20,000 = $166.67 in total interest over 4 months

I = (.04/12) * ([12+1]/2) * 20,000 = .00333 * 6.5 * 20,000 = $433.33 in total interest over 12 months

So, pay just over $5,000/month for four months and lose half an hour's work in interest, or pay about $1,700/month over a year and lose under an hour and a half's work in interest.

You're between a pillow and a soft place. ...is that an expression? I'm inventing it. You heard it here first.

[smartmoneymd]

Agree with the other posts. Don't sweat the small stuff. Focus your energy on earning more on your job, saving money elsewhere (I've met a handful of "frugal-minded" people who easy spend quite a bit of money on weekend beer).

[EnjoyIt]

HopingForFIRE wrote:

I’ve already chased credit cards and have the CSR card and AAdvantage Citi card when it was offering 100K points.  As for the whole $200 item that’s not even the issue.  I make between 300-350/hr depending on RVUs for the month.  The issue was the cash flow but maybe I’m over thinking it.  I appreciate everyone’s input.

Click to expand...

If you have a cashflow issue, then maybe you should delay paying off your loan by 1-2 months.  Get yourself the cash cushion that makes you comfortable, and then continue as planned.  You are on a great course for freedom.  Why waste your stress and brain power on a few hundred or a month or 2 difference.

[Zaphod]

HopingForFIRE wrote:

I’ve already chased credit cards and have the CSR card and AAdvantage Citi card when it was offering 100K points.  As for the whole $200 item that’s not even the issue.  I make between 300-350/hr depending on RVUs for the month.  The issue was the cash flow but maybe I’m over thinking it.  I appreciate everyone’s input.

Click to expand...

In my opinion, if cash flow is the issue just cut back on all of these payments until you feel safe with your cash flow. As long as you're filling all these buckets this year, it doesnt matter. You dont get a badge for completing them 3 months earlier, and certainly not one for stressing yourself out because you wanted to be done super fast.

You're doing an awesome job, dont over think it.

[HopingForFIRE]

I've already chased credit cards and have the CSR card and AAdvantage Citi card when it was offering 100K points.  As for the whole $200 item that's not even the issue.  I make between 300-350/hr depending on RVUs for the month.  The issue was the cash flow but maybe I'm over thinking it.  I appreciate everyone's input.

[DMFA]

Yeah...this is paralysis by analysis.  Even if the math favors doing something besides paying the loans, the relatively short term and low amount make it unlikely to make much of a difference. Think of how $200 compares with your hourly work rate...is it worth it?

IMO: just pay the loan.

[Gas_Doc]

As long as the 401k gets fully funded by the end of the year, just pay off student loans now and work 1-2 extra hours to make up that $200 difference. I mean, if you are really trying to make money off of a credit card offer, why not get one of those cards that offer a $500+ sign up bonus like the Marriott Rewards Premium Card ($720), Chase Sapphire Preferred ($500), Barclaycard Arrival Plus ($500), or Hilton AmEx ($500)?