9 Tips and Tricks to Paying Off Student Loans Faster
Staying on top of student loan debt on a “recent grad” salary can be difficult. Here’s how I paid off over half of my debt in 18 months.
Pay more than the minimum payment. If you have an additional $10 or $20 (or more, of course) each month to put towards your loans, do it. Trust me. It makes a difference.
Auto pay. You won’t have to put any effort into actually making the payment, and you will never be late or miss a payment. Some lenders offer a percentage discount for enrolling in auto pay so take advantage.
Make a budget and stick to it. Be willing to sacrifice to meet your loan repayment goals. Take care of your fixed monthly expenses, and then allocate remaining funds to student loans, savings, and everyday spending (food, gas, etc.).
Pay off the loan with the smallest balance first. Pay the minimum payment on your other loan(s) while putting most of the money that you’ve budgeted for repayment towards the loan with the smallest balance. When the smallest loan has been paid off (and you’ve built some momentum and feel great about tackling that loan!), then you can use the money that was going towards that balance to start aggressively paying off the next biggest loan.
Explore the repayment plans and decide which is best for you. I am currently on the graduated plan. I chose this one because it allowed me to lower the minimum payment for my biggest loan and to put most of my funds towards the smaller of my two loans. Understanding my strategy here? When the smaller loan was paid off, I poured all of the money that I was using to pay it off into the biggest (and my LAST) student loan. Weigh the options and choose the repayment plan that works best for you.
Research loan forgiveness programs. Now let me just go ahead and tell you that some, but not all, of these programs require you to make payments for several years before you can apply or qualify for your remaining balance to be forgiven. However, it’s still worth a Google search. There are several programs available for public service employees, health professionals, educators, etc.
Use windfalls wisely. I know how fun and exciting it is to receive a large sum of money and blow it on new clothes, a weekend getaway, or something else that you just cannot live without. If you are serious about paying off those loans, use some (or all) of that extra cash to make an additional payment.
Earn additional income. Freelance, occasional side jobs, part time employment, surveys, mystery shopping, focus groups, or maybe something else that will allow you to gain experience in your chosen career field or area of interest while bringing in extra income. Find something that works for you and your goals.
Set a goal for how much you want to repay each year. At year end, examine your progress and reward yourself if you’ve met your goal. Paying down debt won’t be easy. It requires sacrifice, patience, and persistence. If you stick to your budget and hit your yearly goal, treat yourself to something nice before jumping on next year’s goal. You deserve it!
Hopefully you find these tips helpful and employ some of them on your path to becoming debt free.