Student Loan Debt ~ 11 Tips to Pay it Off FAST!
Graduating University can be the most exciting and terrifying time of a person’s life. Getting mail about your student loan debt can make this an even more difficult time of your life. Is it possible to pay it off quickly without completely ruining your social life in the process? Possibly. Here are 11 tips to pay off your student loan debt before you turn 30!
1. don’t run away from the reality of your debt
This student loan debt isn’t going to just up and walk away. Someone loaned you this money and they are going to want it back! Ignoring the reality of your largest amount of debt isn’t going to get you any closer to where you want to be. Understand that this debt won’t be for the rest of your life, and the sooner it’s paid off, the sooner you can live your life.
This is something you CAN do, and something you have to do.
2. understand the amount you have and the minimum payment
Login to your student loan services account and any other loans you may have taken out and record the amounts and the monthly minimum payments for each. If you loaded up on credit card debt to pay for books and food during school, add that to your totals.
Add up all the numbers for both the totals and the minimum payments.
Think about this number and how great it will feel when it drops to $0.
3. start a budget (and stick to it)
Do you know what your monthly take-home pay after taxes is? If not, figure out this number. Create a budget using whatever method you feel is best and stick to it. Don’t go over on anything and use your student loans as a bill you MUST pay every month.
It may be tempting to stray away from your budget for a fun night out, or for a holiday… Please do not do this. You need to be committed to the budget and to paying off your student loan debt. This isn’t something you can half-ass!
4. side hustle
Chances are you’re a brand new grad reading this article. Also, chances are your income isn’t’ quite where you want it to be. You just started an entry-level position at a company you’re not so sure about. Raises aren’t really in the works anytime soon, so you better hustle.
Start a blog, take stock photos, be a virtual assistant, or do anything from my list of non-online side hustles here!
One key thing about side-hustling that you need to realize, is that this isn’t fun money. Any money you make above your regular income should go straight onto your student loans to pay down the principal as soon as you possibly can. The lower the principal, the lower the interest and interest is the worst.
5. understand why you’re paying them off
What do you want for your future? Do you want to send your kids to college? The less debt you have the more money you can put toward college funds for your children. Do you want to retire without debt? The earlier you pay off all of your debt the earlier you can build your retirement fund. And money makes money. Start early and you’ll have a better life.
Whenever paying them off gets hard, think about your why.
6. make regular payments
Turn your student loan debt into a monthly bill. If you’re paid bi-weekly, pay a certain amount to your student loans from each paycheque. If your debt is something you pay without thinking about it, there’s a much smaller chance that you’ll stop paying them.
Regular payments will also show the lender that you’re responsible if anything ever happens where you no longer have income and need some relief.
7. see if you qualify for repayment assistance
Most governments will have repayment assistance systems. Depending on your situation you could get your entire student loans forgiven or at least a portion. The factors are usually your total income, and sometimes where you work. Public servants often have the easiest chance finding repayment assistance programs but their salaries are very small so you may be in the same boat either way.
8. give yourself a realistic deadline and reward yourself if you hit it
What is the absolute biggest amount of time you want to be paying these off? If you just got an undergrad, you could start at 22. Do you want them done by 32? A good 10 years. Or by 27? Do it in 5. This is something you need to decide.
The shorter the amount of time the more you’re going to need to budget and really work hard toward this. Pick a realistic amount of time-based on your income and expenses and your life goals.
If you want to be married with children before you’re 30, you’ll need to have a little bit of a nest egg built up so you’ll probably take longer to pay off your student loans. This is okay. As long as your debt repayment reflects what you truly want in life.
9. pay more than the monthly minimum
If you only pay your monthly minimum payment, you’re essentially just paying off the interest every month and never making a dent in the total.
In financial terms, the amount of money you borrowed is called the principal and the money you’re going to pay on top of that to reward someone for lending to you is called interest.
If you just pay off the interest every month you’re going to be paying towards these student loans for the rest of your life. You must pay toward the principal in order to really get your loan amount down quickly.
10. put any extra cash straight on your student loan
Did grandma give you $100 for Christmas? Did you get a couple hundred bucks from a tax refund? Awesome. Free money is great. Put it on your loans. The longer you take to pay them off the more it will cost you and spending that free money on something stupid is only going to give you momentary satisfaction.
11. believe in yourself
You can do this. Many people have done it before. You are the only one that is going to help you out of this situation and your time is now.