Student Loan Debt ~ 11 Tips to Pay it Off FAST!
Graduating college can be the most exciting but equally terrifying time of your life. Getting your first piece of mail about your student loan debt is daunting and really just makes this time even more difficult. It is possible to pay off these student loans without completely ruining your social life, I promise.
You do not need to have your student loans until you die. They do not need to be passed down to your children. There is hope. Here are 11 tips that you can use to help you pay down your student loan debt, and to give yourself some piece of mind.
don’t run away from your debt
Your 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.
know how much you have and your minimum payment
I’ve honestly talked to people about their student loans and they say they don’t actually know the total amount. Wait, what? It’s so important to know the total number and how much you’ll need to pay monthly for each loan you have. You should also add any credit card debt that came from being in school (used for books/food) to your totals!
I totally understand the desire to not know the total and just to know how much you have to pay, but that won’t make it feel as good when the number hits 0.
start a budget
Do you know what your monthly take-home pay after taxes is? If not, figure it out. This is the number that’s going to help you create a budget, and to realize if you need to start a side hustle to pay off the debt. The best budget for beginners is the Zero-Based Budget. Putting your student loans into your budget as a bill is going to show yourself that you can’t run away from them! It may be tempting to stray away from your budget but that isn’t going to get you closer to your goals!
start a profitable side hustle
There are a ton of side hustle student loan debt pay off success stories out there! Why is that? Because working a side job gives you more money which will let you pay off debt!
Chances are you’re a new grad if you’re reading this article or a parent of a new grad! Also, chances are you’re starting at an entry-level position at a company and your income isn’t quite where you’d like it to be. Raises aren’t really in the works anytime soon, so you better hustle!
When you’re in debt, side hustling is the perfect way to pay way more than the minimum payment on your debt! If you take every penny you earn from your side gig and throw it at your loans it’ll take half the time to pay them off! If you want to look into some side hustles you could start tomorrow, check out this post with some really easy to start options!
understand why you want to pay them off early
What do you want for your future? Do you want to pay for your kids to go to college? Or retire debt free? Do you want a bunch of rental property? Do you want to travel the world? You need to understand your why, and all the reasons you’re working toward paying off this debt! The earlier you pay off your student loans, the earlier you can build up money for your future!
Whenever it gets hard, just think about your why.
make regular payments
Turn your student loan debt into a monthly bill. If you’re paid bi-weekly, pay a certain amount of your student loans from each paycheque. If your debt is something you pay without thinking about it first, there’s a much small chance that you’ll stop paying them. Regular payments are also going to show the lender that you’re responsible if anything ever happens where you can no longer pay your debt and need some relief.
see if you qualify for repayment assistance
Most government student loan programs have some kind of repayment assistance system. Depending on your situation you could get your entire student loan forgiven or at least a portion. The factors are usually your totally income, or where you work. Public servants usually have the easiest chance of finding assistance programs, but their salaries are very small so don’t go into the public sector just because you don’t want to pay your loans haha.
give yourself a realistic time frame and reward yourself when you get there
What is the longest amount of time you’d be willing to be paying them off? If you just got your undergrad, you could start paying them off at 22 years old. Will it take you 10 years? So you’ll be done at 32? Or 5 years so you’re done at 27? This is something that you need to decide. Where do you want to be in 10 years? If you pay off your loans faster you’ll be more financially secure by the time you’re 32.
You need to pick a realistic amount of time based on your income, expenses, and your life goals. If you want to be married with children before you’re 30, you’ll probably start a nest-egg before paying off your loans entirely and that is okay. Your goals should reflect what you want in life.
always pay more than the minimum
If you pay only your monthly minimum payment, you’re essentially just paying off the interest and hardly making a dent in your total loan. Most companies decide on your monthly payment as your total interest for the month plus a small amount, this means you hardly change the principal. If you’re only paying the interest every month you’ll be paying these student loans for a lot longer than you want to.
put extra money straight into your loan
Did grandma give you $100 for Christmas? Did you get a couple hundred bucks from a tax refund? Awesome! Free money is great. But you really should put that straight on your student loans. Whatever you buy with that free money is only going to give you momentary satisfaction, and being debt free feels so good.
believe in yourself
The most important thing you can do is to believe in yourself. You are the only one that is going to help you out of this situation. Your time is now. Get moving. Hustle. Do whatever you need to do!