When you think about your student loan debt, of course you’ll want to get rid of it as quickly as possible. Winning the lottery is unlikely, so you need to make a plan to avoid paying more interest than necessary. One of the best places to start is with a positive attitude. Educating yourself on how to pay it off is a great first step. Implement some of these tips to pay back your student loans faster and reduce how much you owe.
1. Take stock of your student loan debt and make a plan
It’s natural to want to avoid facing how much you owe, but you should have a clear understanding of your student loan debt in order to know how to pay it down. Access your loan servicers’ websites to find the total principal amounts remaining and interest rates on your loans. Include your credit card as well. Make a list of all of your debt, and total it to know how much you owe and to whom. Then you can make a plan to pay it down as quickly as possible.
2. Pick up extra work to increase your payments
Consider your workweek a 50 to 65 hour week instead of the traditional 40 hours. Working a part-time job or freelancing in addition to your full-time position will bring you extra income that can be used toward paying off your loans. Label this additional income as “additional debt payments” so you aren’t tempted to use it on anything else.
3. Work for a company that will help
Companies like PricewaterhouseCoopers are tailoring their offerings to Millennials who have student loan debt. They are offering yearly contributions of about $1,200 to pay down student loan debt. This is offered through a company called Gradifi, which is a company that offers Student Loan Paydown Plans.
4. Give up your ideal living situation
Get basic with the type of shelter you need while you’re in debt – you need somewhere clean, warm, and safe. Your parent’s home or sharing an apartment with friends will do the trick. Forget the one or two-bedroom in center-city and live cheaper while you pay down your debt. This will allow you to put a lot more toward your loans than if that money were going to rent.
5. Put a temporary hold on luxuries
Revamp your budget to cut out unnecessary expenses like eating out, parties, travel, cable TV and music subscriptions, and clothes. Evaluate where most of your budget is going and where you can cut corners. Use the newfound savings to increase your monthly payments.
Over the last few years, a number of private lenders have started offering student loan refinancing. Student loan refinancing rates start as low as 2% for very qualified borrowers and vary by lender. By refinancing your loans at a lower interest rate, you can reduce the total cost of your student loan debt. A lower rate means lower interest payments!
When you refinance student loan debt, you can select a new term length (repayment period). Term lengths typically range from 5 to 20 years but vary by lender. In addition to getting a lower interest rate through refinancing, selecting a shorter term will reduce your total cost even more. Most student loan refinance lenders do not charge any application, origination, or pre-payment fees.
If you’re interested in refinancing with College Ave Student Loans, check out their refinance calculator to review your options and see how much you can save.
Tip: When you refinance, you forfeit the benefits associated with your original loan(s) while adopting the benefits of your new, refinanced loan. You should consider the benefits you’re forfeiting before refinancing.
7. Reduce your interest rates
Sign up for automatic payments to reduce your interest rates. Some loan servicers will reduce your rate, usually by 0.25%, when you do this. Although it’s not a huge amount, every little bit helps. Plus, it’s one less thing you need to worry about doing every month.
8. Volunteer your time
By volunteering your time, you could raise funds or earn rewards to repay your student loan debt or possibly receive eligibility for loan forgiveness or cancellation. For example, AmeriCorps, Peace Corps, SponsorChange, and Zerobound all offer programs. Research your options to see what might work with your personal situation.
9. Leverage your tax refund
It’s tempting to spend your tax refund on a night out or purchases you’ve been eyeing, but use it to pay down your loans instead. Right when you receive that refund, take the money and put it towards your student loan debt.
10. Turn gifts into additional payments
Forego your birthday and holiday gifts in exchange for loan repayment support. Discuss with your friends and family or post on social media that you’ll happily accept cash payments to pay down your debt.
For most people with student loan debt, there is no quick and easy solution. Maintaining a positive attitude and making a plan, however, will keep you on track to becoming debt-free.