You, just like many other people that went to college, are faced with student loan debt that you must now pay off. Its not a fun feeling having this dark cloud over your head, just taking a portion of your hard-earned money away. Don’t worry, there are ways you can pay off student loans fast, and get it all over with!
According to the statistics, 68% of all students that attend college took out student loans at an average of $37,172 (at the time of writing). This has led to homeownership at a later age, childbearing at a later age, and even getting married at a later age. This is all due to the fact that so many have these student loans that are stopping them from progressing in life.
You don’t have to bear student loans anymore if you have them. There are ways you can pay them off fast!Tweet
Let me show you the top 10 ways you can pay off student loans fast:
- 1. Loan forgiveness programs
- 2. Refinance your student loans
- 3. Consolidate your student loans
- 4. Paying more than the minimum
- 5. Attack it with any extra windfall
- 6. Debt Snowball on multiple loans
- 7. Keep track of your finances
- 8. Get help from your employer
- 9. Avoid student loans forbearance
- 10. Ask for help
1. Loan forgiveness programs
I’m sure many of you have heard of this program. Certain types of loans under certain types of repayment programs can actually qualify to have the student loan balance forgiven. Typically it takes about 20 years to have the loans forgiven, but that’s also quite a long time, and not guaranteed since the government can change policies at any time.
I wrote about the different loan forgiveness payment plans in this article, and I recommend that you take a look at it.
2. Refinance your student loans
The higher the interest rate, the higher your payment amount, and the higher your overall balance will be after you pay it all off. You can always see if you can refinance your current student loan balances for a lower rate. Not only does this lower your monthly payments, but it also reduces how much you will owe in the end because of the lower interest rate.
I’ll always recommend Credible as it’s the one-stop-shop to compare student loan options and gives you the best rates if you want to refinance your student loans.
3. Consolidate your student loans
This one has also helped a lot of people in managing their student loans and helps them pay it down faster. By consolidating all your student loan payments into one predictable payment, it helps plan your payments accordingly and gives you a little wiggle room.
By not having multiple payments that you have to constantly juggle around, you can focus on one consistent payment and always pay ahead on the minimum payment requirements, thus speeding up your repayment.
You can check out Credible for refinancing options.
4. Paying more than the minimum
Just like credit cards, if you only pay the absolute minimum, you will only make a tiny dent in your student loan balance. If however, you pay a little more every month, no matter how small the additional amount might seem, you will be pleasantly surprised at how much extra you would have paid down.
An easy way to make sure that you always do this is to set up an automatic payment to your student loans with a little more extra. You can always increase that payment amount by $10 every few months (as an example). Because it’s such a small amount, you’ll not feel like you are paying a lot more, but it will make the transition to paying extra a little less painful.
Make sure to set yourself a calendar reminder every few months to go back and adjust the payment amount so you don’t forget, and this will make a huge difference!
5. Attack it with any extra windfall
So you got a work bonus, a cash gift, or even a refund check from your tax returns, here’s what you need to do with it. The majority, if not all of it, should be thrown right at the student loan debt. The easiest way to think about it is to just pretend that money was never yours. You were doing just fine without it. You will also do just fine without it.
With this mindset, you’ll be surprised at how much extra you can throw at the debt, and in turn, will be beneficial to you and paying off the debt much faster than you had even imagined.
6. Debt Snowball on multiple loans
If you have multiple student loans, and can’t consolidate them, you can instead opt for the debt snowball method.
Basically, you begin with the smallest debt first and work your way up to the highest. You will pay extra and as much as you can on the smallest balance so that by the time you are done with that, shift all your focus to the second one in line. By doing this, you can get to pay off your student loan debt much faster from smallest to biggest! The satisfaction of paying off a loan is motivating enough to keep going! With a consistent budget, you should give it a try.
7. Keep track of your finances
It’s extremely important that you keep track of all your finances and set up a budget. Too many people just live day to day without having a deep understanding of their money. By keeping track of all your money, it will also help keep you laser-focused on paying off your student loan balance.
I strongly recommend using Personal Capital to keep track of your finances and budget! Super easy to use, and it’s free!
8. Get help from your employer
Depending on who you work for, some employers have programs that have loan repayment assistance! This would be a fantastic way to pay down your student loan debt much faster than if it was on your own. Keep an eye out if you are in the job market, as some employers are starting to offer this as an incentive and job benefit.
9. Avoid student loans forbearance
Forbearance grants you up to 12 months of paused payments on your federal student loan debt. However, the consequences of student loan forbearance are real. You’ll have thousands of dollars in extra interest charges. For example, let’s assume you owe $100,000 of student loans at a 6.5% interest rate. With only a single year of forbearance, you’ve accrued $6,500 of interest
As much as pausing your student loan payments might seem like a good idea, you can’t pause interest on the loan! At the end of the day, you will just owe more and more.
10. Ask for help
The last one is straight forward, but also requires a bit of courage!
You can always reach out to friends, family, or colleagues and see if they can provide you with financial assistance with your student loans.
If you do most of the items mentioned in this article before you know it, you’ll be all done with your student loans, and on your merry way to financial freedom!