Hi Gail! My mom is an avid reader of your site, and suggested I become one too. I've just finished university and have a student loan of $10,500 (quickly accruing interest). I am currently in the grace period until November 1st. My first payment is due on Nov. 30th. (Basically I don't have to make a payment, until Nov 30th, but interest still accrues).

This student loan is actually two (which I didn't know at the time). One is with Alberta Direct Lending for $6005.00 (interest rate is prime) and the other is with NCLSC for $4495.00 (interest rate is prime plus 2.5%). I also currently have approximately $4000 in credit card debt (interest rate is 11% with a $22/annual fee). I have created a budget, and decided I can put $500/month towards debt repayment (I'm also putting $300/month towards RRSP/Emergency/House Fund at $100 each category/month). I gross $37,500 year.. so i take home about $2000/month after taxes.

My question is what is the best plan of attack to pay off all the debt within 18 months? (my arbitrary goal), so that I can take the 500 and put it towards savings? Currently my plan is to put the full $500 (250 every two weeks corresponding with pay periods) on my credit card, until November 1st, and then re-direct the payments to the student loans. I was thinking $250 for each loan once a month, so 500 total a month to debt repayment.

This is the best scenario I can think of - is there any guidance or suggestions you can give me? Thank you kindly!!

Thanks for the details Jessie (people often don't tell me enough) and tell your mom I think she's very smart!

Now on to your question: How did you do in math at school Jessie? If you take a total debt of $10,500 and divide it by 18 (the number of months within which you want to pay this off), what do you get? I get $583.33, which is more than the $500 you've got allocated, and doesn't include the interest you'll have to pay.

Why don't you go to my Own Up to Your Debt worksheet and use that to help figure out how much you need to set aside.

If you want to do it the hard way, take your principal and multiply it by your interest rate and divide by 12. That's your monthly interest payment.

Then take your principal and divide it by the number of months within which you want to have it paid off. That's your monthly principal payment.

Add the amounts together. That's the amount you need to be putting toward your debt every month to meet your goal.

Good luck.