If you have been watching the news, you know Student loan servicers have been under…
You thought you finally had peace of mind because you graduated from college, but now the weight of the debt you incurred feels like a mountain on your shoulders. How can you pay this money off faster and still remain relatively sane?
Here are tips from 3 experts on how to pay off college debt fast. We hope this helps!
How To Pay Off College Debt Fast – Advice From 3 Experts
Kayla Matthews, Dumb Little Man
According to author Kayla Matthews for Dumblittleman.com, the standard repayment period for student loan debt is 10 years. “Oh my!” you might say, but there are simple ways to lessen this burden and pay this massive debt sooner than later.
Kayla Matthews lists 5 simple ways to pay off your college debt faster:
#1. Pay more than the monthly minimum.
a. This is probably the best way to pay off loans faster.
b. If you can pay $75 per month more on a $10,000 student loan with a 7% interest rate, for example, you can save almost $700 over the loan’s life.
#2. Re-evaluate your repayment methods if you have multiple sources of debt.
a. Stacking or laddering is one option.
i. Reduce the debt costing you the most the fastest.
1. If you have a Visa credit card with $600 at 12%, a department store credit card with $300 at 11%, and a student loan of $10,000 at 7%, you’d put extra money toward the credit cards. When you are free of credit card debt, the money would go toward the student loan.
i. You place any extra money toward the debt with the lowest dollar amount, ignoring the interest rates, eliminating one card.
#3. Get a higher-paying job or raise.
#4. Consolidate and refinance your loans.
a. Apply for a loan consolidation with a lower interest rate. The best sources for this are often nontraditional lenders such as Sofi rather than banks. You will have to have an excellent credit score to qualify.
#5. Use any windfalls to pay down student debt.
George Kamel, The Fine Print Podcast
#1. Get on a budget.
#2. Find out your payoff date.
#3. Pay more than the minimum payment.
a. Be sure to tell your loan servicer to keep next month’s due date the same and to just apply the extra amount of money to your current loan balance.
#4. Make some financial sacrifices.
a. Look at your lifestyle. What extra stuff have you been living with that you can do without? Bye-bye cable package. See ya bougie subscription boxes. Maybe cut your housing cost in half by finding a roommate or renting out a guest room.
b. How about selling some junk you don’t need anymore?
#5. Pay off student loans with the debt snowball.
#6. Apply every raise and tax refund toward paying off your student loans.
#7. Increase your income with a side hustle.
#8. Don’t bank on student loan forgiveness.
a. With the current program there are many requirements you have to meet in order to be eligible. It isn’t guaranteed. Do your homework.
#9. Refinance student loans—if it makes sense.
a. Do your homework. Read the fine print or you could end up deeper in the hole than you were before.
#10. Stay motivated.
#1. Make additional payments.
#2. Establish a college repayment fund.
#3. Start early with a part-time job in college.
#4. Stick to a budget.
#5. Consider refinancing.
#6. Apply for loan forgiveness.
#7. Lower your interest rate through discounts.
#8. Take advantage of tax deductions.
#9. Ask your employer about repayment assistance.
Whatever choices you make, it seems, just like college, one needs to do homework on what is the best choice for your life and circumstances. Here’s to knowing these tips will help you make the right choice for you!
Refinance Your Loans With Juno Student Loans
My College Planning Team has joined forces with Juno Student Loans to solve the high-interest loan problem for students. You can learn more about Juno in our blog Meet Juno Student Loans (Formerly LeverEdge).