How I Paid off My Student Loans at 30 as PGY1.

I hate debt with a vengeance.

It all started when I was about 5 years old. I became aware of the dire financial situation my family was in. Debt collectors paid daily visits at our apartment door. I was scared when my dad would go off to negotiate pay back terms with the creditors because the Chinese Mafia movies I watched people’s extremities get amputated as warnings for missed debt repayments.

I came up with a plan. I started collecting coins around the house. Taking them out of my dad’s pants pockets, jacket pockets, finding them under the refrigerator or behind the cabinets. I was gaining momentum as my pile of coin built up, dreaming of the day when I would free my family from the threats of the creditors like a hero. It was kind of my Mulan fantasy.

But my mom caught on, sat me down one day and said, “I appreciate your effort in collecting coins, but we need that money for food… we can’t afford to save those coins, or we will have to skip dinner tonight.”

My dream was shattered. Even my most valent and brilliant (in my 5 year old mind) efforts weren’t helpful. I felt utterly powerless. I knew not how exactly, but I knew I’d avoid debt at all costs.

My family immigrated to the US when I was 16. While I was getting ready to attend a community college given it was cheap and that I was just a Fresh off Boat (weren’t expected by my guidance counselor to blow the SAT out of waters), I scored high enough and get into all colleges I applied to. I applied to 4: UC Berkeley, Irvine, UCLA, and UCSD.

My grandpa gave me 40k for college, I worked 2-7 jobs depending on the semester. I graduated from UCB penniless (net worth zero) in 2007 after 9 semesters and 1 course short of double majors.

I abandoned the idea to pursue medical school and started a family instead when I met Mini Wise Money’s dad. We were not ready to be parents financially. We got into 100k or so of credit card debt, which I spent the following 3 years paying off before starting medical school. This short sprint to pay off my consumer debts reaffirmed my desire to stay away from debt. I learned that debt, no matter in what country, with Mafia creditors or not, is a horrible thing.

I started medical school a single mother, with a sweet 3 year old daughter, and 20k of $100 bills. My medical school cost of attendance from 2010-2014 averaged approximately 90k/year.

I remember vividly, crying on the phone and complaining to my mother, [mini quote]

I was so debt averse that I really didn’t spend any money beyond the absolute necessities such as food and shelter, my splurges were for Mini’s ballet lessons discounted at the community centers, etc. I worked 2 jobs, mostly totaling 60 hours/week on top of full time study throughout medical school. I got some government assistance for health insurance and food (which was a big deal because health insurance for Mini and me would have cost 4k per year otherwise.)

I also kept opening new credit cards every 12 months or so as needed to pay for expenses and ride the debt balance on 0% interest for as long as possible before balance transferring to another card (paying 3% transaction fee for 1.5 years of 0% APR, so effectively 2% annual interest rate). As last resort, when I’m not able to squeeze out more cash flow, I’d take out the minimum amount of student loans at the latest minute possible (knowing that with student loans, the origination fee ranges from 1-4% and the interest rate is 6.8% the day federal government disburses the loan.)

When I was getting ready to purchase a home with a doctor’s loan during MS4, my net worth was -100k. 70k on credit cards with 0% interest rate, 30k on student loans with 6.8% interest rate. I threw every penny I had towards my student loans (my highest interest debt, that’s growing and decreasing my net worth the fastest). When I have a dollar of cash, I pay my student loans. If I get cash rewards from my credit card purchases, I deposit them in my bank to pay my student loans down further. I spare no penny when it came to that 6.8% killer interest rate.

Early 2015, I try to refinance my student loans with DRB, thinking it’s the best way to help me destroy my debt more rapidly since a lower interest rate guarantees that every dollar I channel towards my debt is more powerful, decreasing the debt principle @ a faster rate.

DRB rejected me. They required that I have $3,500 after all bills per month income. (This happened just few months before DRB rolled out their famous resident/fellow refinancing product.) My PGY1 annual income was $50k, and I didn’t have a spouse with income. In spite of my excellent credit history and score, and my unusually small student loan of 20k then, the only way DRB would refinance me was with a high income cosigner.

I was pissed. So I said screw this. I’ll refinance myself.

I open chase slate and got 20k credit limit. I wrote myself a check, deposit it in my checking account, and paid off my student loans. I like chase slate because it is the only card in the market that gives you 0% transaction fee for balance transfer check within the first 60 days of account opening. There, I was officially free of student debt before I turned 31. All my whopping 5 figure debt is at 0% interest rate on my credit cards. This very fact would keep some people up at night. But the 0% interest makes me sound asleep…

Then, I started aggressively attacking my 0% interest credit card debts, especially when they come due. When the credit card companies are “switching” after I took the bait 12-18 months prior, I’d either balance transfer the debt with expiring 0% interest rate to a new card or I’d pay said debt off before hitting the high 16% rate.

As I realize more and more that my happiness is found in things that are mostly monetarily free, I have been just enjoying watching my net worth grow with paying down liabilities and building up assets.

I’m happy to say as of today, I have zero credit card debt and zero student loan. I’m 32, soon to be PGY3, a happy, debt-free, mommy, radiology resident, & personal finance blogger @ drwisemoney.com.