High amounts of student debt don’t just plague the young. No, more than 44 million Americans are buckling under the burden of over $1.5 trillion. Many people who graduate can spend the next 10-20 years paying it all off. It can be nearly as expensive as leasing an expensive luxury vehicle with high payments and interest.
It wasn’t too long ago that we shared some quotes from Shark Tank’s Kevin O’Leary. He talked about doing whatever you can to get rid of your student debt as soon as possible. That means waiting to spend your money on other things until that debt is paid down. If you can live frugally and pump extra money into the loan, you’ll be set.
Call Now 844-332-2079There are other strategies as well. Here are 7 steps for paying off your student debt faster:
1) Pay Extra as Often as You Can
This one might sting a little bit. One of the biggest mistakes people make is only paying the minimum balance. But it’s like with your credit card. If you make the minimum balance, you’re only putting minimum effort into it. That gives interest and other charges a chance to catch up. If you’re only putting a little money towards the principal, how do you get ahead of it?
That doesn’t mean you have to pay extra every month. But it does mean you should consider paying more whenever you get the opportunity. For example, put off that expensive vacation. Don’t waste your tax return money. Buy a beater for a car. All that money should go towards your student debt. When it’s paid off, you’ll have all the financial freedom you can handle.
2) Make Two Payments
There’s a certain trick that can help you pay off more of your student debt. It might seem strange at first, but it works. If you owe $400 per month, pay $200 around the 15th and $200 on the 30th. You might think the math is off, but by doing it this way, you actually make 13 whole payments in a year. That gives you an extra month you paid off!
3) Don’t Forget Auto-Pay
This might seem like it won’t help too much, but it can! The biggest part of the process is ensuring you tackle your student debt every month. People sometimes forget, become delinquent, and it works against them. By setting up auto-pay, it’s automatically deducted. And some lenders might even give you a discount for setting it up.
4) Refinance Your Loans
This can be a big one down the road! When you first start out going to college, you don’t have a track record of steady work and good credit. That hurts you. But, over time, you will be able to prove a good work history and improve your credit. Refinancing your student debt is always a great idea!
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By refinancing, you’re taking out a new loan to pay for the old that. Because your credit has improved, your new loan will come with a much better interest rate and lower payments. It makes making payments a whole lot easier!
5) Does Your Company Offer Repayment Assistance?
There are a lot of companies out there that do what they can to recruit the best talent. They offer 401(k) and profit-sharing incentives. These days, many companies are realizing the burden of student debt and offer repayment assistance. It doesn’t hurt to ask!
6) Volunteer Your Time
There are companies out there, like SponsorChange, who loves helping others. In exchange for volunteer, non-profit work, they offer student loan repayment. These are companies that could use your skills. Once each project is completed, they will offer payments towards your student debt. It’s a great way to support a cause you’re passionate about and pay down debt.
7) Create a Plan
This is super important. If you watch Dave Ramsey, you know he has had a lot of success helping others get rid of their debt. How does it do it? He puts them on a plan. That plan might include some of the things listed in this article. It will require frugal living until the student debt is paid off.
If you don’t pay off your student debt quickly, it will encroach your life in every way. It will prevent you from buying a house, a car, saving money for retirement, and more. The quicker you get it out of the way, the better!
