Do you have a student loan? Should you repay it? In this article, we look at 15 strategies to quickly wipe out your student loan debt. Read more about these 15 tips here.
Strategy #1: Pay More Than the Minimum Payment
It’s a small difference each month, but it adds up over time! Make sure to calculate what this would be for your loan before choosing an amount to go with.
Even your small change earned from tips from your part-time job could make a difference if you put it towards your student loan debt.
Strategy #2: Choose Your Repayment Plans Carefully
If you have a lot of high-interest loans, for instance, it can be easier on yourself and more beneficial to use the graduated plan rather than paying them all back at once
Strategy #3: If Your Job Offers Student Loan Repayment Benefits, Sign up for It
It’s an added benefit that will help you pay off your student loans faster and get rid of student debt for good.
Strategy #4: Refinancing Your Loan Is a Great Way to Lower Interest Rates
It’s best for those who are focused on paying their debts back quickly but it can be costly so make sure you do the math before refinancing.
Strategy #5: Get Tax Cuts Through the Student Loan Deduction Program
Doing this will lower your taxable income, and by extension, reduce how much you have to pay in taxes.
Learn how to avoid student debt early by knowing how to get tax cuts and using technology like autopay.
Strategy #6: Automate Your Payments
Enrolling in autopay is a great way to ensure that your student loans are getting paid on time so they don’t end up hurting your credit score.
Strategy #7: Start a Side Hustle
Consider something like delivering food or driving for Uber and use your earnings to make extra payments towards the balance on your loans.
Strategy #8: Cut Unnecessary Expenses
Eliminating non-essential expenses is a great way to make room in your budget for extra payments on your student loans.
Study how you can live within your means while enjoying your student life. Use the extra cash towards softening the burden of your student debt.
Strategy #9: If You’re Flush With Cash, Make Additional Payments to Your Student Loan
When you earn more money, don’t spend it rashly. Making extra payments towards your student debt will help you pay off your loans more quickly and reduce the total interest you’ll have to pay over time.
Strategy #10: Opt for Bi-Weekly Payments
Instead of making a payment towards your loan every month, make a payment twice per month reducing eventual long-term student debt.
Strategy #11: Eliminate Interest on Your Capitalized Balance
This will prevent the balance from increasing and save you money over time.
Strategy #12: Make Extra Payments Using Your ‘Found’ Money
‘Found money’ is the term used to describe any funds you may have that are not already committed to other expenses such as student loans. Put this towards your student debt.
Strategy #13: Motivate Yourself to Pay Your Student Debt
This will help you to save money in the long term and eliminate some of your stress as well so you can concentrate on your studies.
Part of being a student no matter what course you’re studying is to learn how to budget and handle debt. If you have a student loan, it teaches you to make adult decisions in your youth.
Strategy #14: Always Make a Budget
Once you have a clear idea of what’s coming in and out each month, take some time to figure out how much money will be left over for paying off student loan debt. Living on a budget is often the best method.
Strategy #15: Make Some Financial Sacrifices
If the money in your monthly budget is not enough to pay off student loans, you may need to make some sacrifices such as eating out less or going on fewer dates.
No pain no gain is what you get when you take out a student loan, but if you use these 15 strategies you may be able to pay off your student loan debt before you graduate!
Got a Question About a Student Loan? Check These Answers First
How Do I Find Out How Much Interest My Student Loans Are Accruing?
This varies by student loan provider, but in most cases you can go online to see current interest rates and other account information.
What Is the Average Monthly Payment for Student Loans?
This varies by type of loan and interest rate. In general, a good starting monthly payment to cover both principal and interest would be $100 each month for every thousand dollars owed (e.g., if you have $25,000 in student loans at an average interest rate of six percent that accrue one-percent per year or 12% annually).
How Do I Pay off My Student Loan Debt Faster?
One way is to increase your monthly payments. For example, if you are currently paying $100 per month and have a thousand dollars of debt, switch it up so that instead you pay $200 each month which will cut the number of years for repayment in half (i.e., from ten to five).
Should I Consider Refinancing or Consolidating My Student Loans?
It depends on the type of debt and interest rate. If you have a student loan with an average interest rate of six percent, it would be worth refinancing to four or five% if you qualify for this option.
The same is true for consolidating your loans into one monthly payment – only do so if the benefit outweighs the cost!
If you’re overwhelmed by your student loans, don’t despair. There are plenty of ways to pay off student loan debt faster and start living a more carefree life today.
You can get started by following these strategies for paying off student loans as soon as possible.
You might want to check out our article on Equity Release.