12 Ways To Pay Off Student Loans Fast
To pay off student loans fast is the number one priority of anyone who ever attended college. Nothing is more of a slap in the face than receiving your first big student loan bill in the mail six months after graduation. Fret not, thanks to the internet there are many ways to pay off student loans fast.
Even if you are not a financial wizard, there are many options available to help you start paying off your loans fast. Here are 12 ways you can start working towards being debt-free today.
Enroll in autopay
Sometimes when you set up automatic payments you will receive an offer of interest reduction. Contact your loan servicer to find out if an autopay discount is available. Plus with an autopay arrangement, you will never have to worry about missing a payment.
Make extra payments
After enrolling in autopay and you begin making consecutive payments each month, it would be a good idea to figure out if you can afford to make extra payments. An extra payment will help you pay off student loans faster. It’s simple math. The more you pay now the less you have to pay later on.
So take the time to look at your budget and see if you’re actually able to make more than one payment a month.
Pay off interest
Unless your loans are subsidized by the federal government, they will accrue interest while you are in school. Once you graduate that interest will capitalize, once you begin making repayments. Choose to pay off accrued interest before your loans capitalize. It won’t speed up the payoff process but it will means you will have a smaller balance to get rid of in the end.
Make financial sacrifices
When I graduated from college in 2015, my dream was to live in New York City and become a writer. I was going to be the modern-day Carrie Bradshaw and live in a gorgeous brownstone apartment somewhere in Manhattan preferably near Central Park. I currently reside 40 minutes outside of Boston. Needless to say, that dream has not come true for me yet and probably for good reason. I would be eyeball into debt living in a major city alone. I couldn’t imagine also worrying about paying off student loans on top of it. So maybe your dreams will be deferred for a little bit too. However, sacrifice now often leads to reaping the benefits later!
Create a budget
Everyone should have a budget. How else are you to know how much you have and are spending each month? Having a budget helps you to see where your money is going. If you want to pay off student loans fast, a good chunk of your income should be going towards loan payments.
Apply every tax refund to debt
Tax season comes around every year and we anticipate the money we get back. Instead of planning trips to Cancun or Europe, apply your tax refund to debt. You can always use a portion of your tax returns on personal use like a trip or a new car. Just do the math first! Often enough, a tax refund of a thousand dollars can be the equivalent of two months worth of student loan payments.
Increase income with a side hustle
Pay off student loans fast with side jobs to earn extra money. If you enjoy writing, you can become a freelance writer and earn money on the side for your skills. You can sell old clothes or create artwork to sell on websites like Amazon and Etsy.
Consolidate and refinance your loans
The goal of refinancing is to decrease interest rates, which means more money going towards paying down your student loans. When you refinance multiple loans you get one consolidated loan with one monthly payment; a simplier method to pay off loans fast.
Take a job the offers loan forgiveness
Public service jobs, like teaching, may offer forgiveness on part or all of your student loans. There is a catch, you have to meet all the requirements and complete the full term of the work required in order to receive loan forgiveness. So if you are studying to become a teacher or work in the medical field, it would be a great option to explore.
Make payments while in school
If you are able to work while in school, you can begin paying off student loans fast now than waiting for graduation to begin making payments. It will take some effort balancing school, work, and having a social life but it is doable. There are many on-campus jobs that limit students to just working 20 hours a week because of heavy coursework loads. However, if your grades are going to suffer as a result of working that might not be the best choice for you.
Pay more than the minimum
To pay off loans fast, pay more than the minimum required each month. Even if it is an extra $10 more it will all add up and help you get ahead. There may come a time where you are struggling to make a payment, pay more upfront can ensure you don’t fall too behind on your payment schedule if things get a bit tough financially. But always consultant your bank lender if you are struggling to make payments.
Be aware, that loan servicers sometimes will apply the extra payment to next month’s bill. Just instruct your servicer to apply overpayments to your current balance and to keep next month’s due date as planned.
Eliminate unnecessary bills
Pay off loans fast by cutting unnecessary bills and applying that extra money to your loans. It can be as simple as re-evaluating whether you actually need five different streaming services. Or if you have a gym membership that you get charged monthly for but don’t actually use, cancel it. It’s worth it to look at our spending and find ways to cut down on unnecessary spending where we can.