On Monday I reported that I had just completed a milestone: I had paid off half of my personal loan in about 15 months. I have paid off about $12000 in about 7 months. Now I don’t think I can keep up that kind of pace. I was able to make larger payments because I taught an extra course and I have some extra monies come in over the summer, which allowed me to jump start my debt payoff even more.
I also noted on Monday that I had a dilemma. My dilemma is do I continue on this larger pace of paying off the loan quicker or do I lower the payments, take that extra money and maybe invest it or direct the money to my other debts (e.g. mortgage, student loan, etc). I have that dilemma because the interest is super low (2.39%) and I can actually make money if I establish a brokerage account and buy a dividend investor mutual fund or buy individual stocks that have great dividend yields.
After mulling it over for a couple of days I have come up with a new challenge. I want to pay this particular loan off by December 2016. That is 17 months away. Now if I continue just paying my minimum payments I will come up a couple of thousand dollars short. So I need to find some extra money in their somewhere. What I would prefer to do is actually pay this loan off by my birthday in 2016. That gives me 13 months (my birthday is in August). But because of potential unforeseen circumstances I am setting my goal at December 2016 this loan will be paid off. Then I can take my payment (I am currently paying $800 a month on it….I am paying much more than the minimum) and direct those monies somewhere else or invest it.
What do you think? Good idea? Too long of a time frame? Do I need to set an even more ambitious goal?