10+ Ways To Pay Off Student Loans Faster

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Getting a student loan is, sometimes, a scary thing to do. Paying it off is a whole another battle.

Student loan debt in 2017 is $1.3 trillion. That’s trillion with a T not the B as in billions or M as in millions.

When you step outside of college, you have too many things to worry about aside from paying off your student loans fast. You have to worry about getting a job, working well in your new job, paying your rent and other expenses, and so many things.

When you are just starting out your career and don’t make a lot of money, trying to pay off student loans faster can make your life miserable.

Or I should say more miserable.

The truth is, even when you’ve been out of the school for a long time and been making a lot of money, student loans repayment can still be a challenge and a headache.

As many people and experts say, it is always best to pay off your loans on time. I say, on the other hand, that it is best to pay it off earlier.

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10+ Ways To Pay Off Student Loans Faster

Here are some tips and ways through which you can pay off student loans faster. Consider this small guide and see how you are able to get that student loan off your shoulders in no time.

1. Know what you owe and to whom.

Effectiveness Level: High

You simply can’t determine how long you are going to pay off your student loan debts when you don’t exactly don’t know how much you owe.

If you don’t know what the amount is and no idea who the agency you owe the money to, it’s ok. There are products, agencies, and services that can help you figure out all of those.

Credit Sesame is helpful and lets you see much much you really owe and to whom. It will help you figure out what your balance is, what you can do to pay off your student loans faster, among others.

Better yet, it will show you available offers are fit for you to pay off your student loans faster.

Credit Sesame is FREE to use. Plus, you’ll get a lot more benefits such as credit reporting and score and identity theft protection.

Click here now to get an account with Credit Sesame for FREE.

 

2. Make a budget. 

Effectiveness Level: Medium-High

You need to make a budget regardless of how much or little you have. Yes, even when you have a lot of money, you need to make a budget.

It is all about making sure you trim down all of your unnecessary items. This helps you in making extra payments much easily.

You can give up alcohol or daily hang outs. Hang out once in a week or maybe once in two weeks. Stay away from eating out. If you have a laptop, cut down your cable TV because you can simply watch almost anything and everything on YouTube, right?

Simple adjustments will make a big difference.

Also, I recommend you use Spentapp, which is FREE to use. It will help you organize your expenses, recommends financial decisions based on your spending habits, and pay you money back for certain purchases.

We used Spentapp when we were paying off our $40K debt. What happened next? We paid it off and saved over $70K at the same time in 2.5 years, thanks to the FREE recommendations from Spentapp.

Keep it gradual and do everything in a proper cycle. The effectiveness of this tip obviously depends on how much you are willing to trim down your budget and how faster you want to get rid of your student loan.

Click  here to setup your an account with Spentapp and be on your to a healthy, debt-free life.

Read: Retirement Planning: Reasons People Cannot Retire

 

3. Refinance when possible.

Effectiveness Level: High

Refinancing your loans is really effective when it comes to paying off your student loan faster.

Typically, the life of a student loan is more than 10 years. Sometimes, it’s longer. You will have the opportunity to refinance your student loans with better interest rates and payments.

You should take this opportunity when possible.

Upstart is widely known for finding great refinancing rates for student loans. At not cost, it can help you find the best rates based on your credit, income, and other factors within a couple of minutes.

It is a great move when you refinance your student loan with a much lower interest rate than what you currently have.

Why? It’s because you pay lower interest every month and your total payment for the life of the loan is much lower than if you stay with what you currently have.

Click here now to find out the lower rate Upstart can get you. Two minutes or less of your time can make thousands of savings in interest payments.

 

4. Pay more than the minimum installment.

Effectiveness Level: Medium-High

Aside from paying off your student loan on monthly installments, I recommend you pay a little more than the minimum payment every month preferably putting that extra payment into principal.

Why? It’s because when you pay the principal, the interest you get charged tends to decrease. A couple of extra dollars here and there may mean shortening the length of your loan by a couple of months.

The effectiveness of this tip depends on how much extra you are able to pay. The more you put as extra payments, the less interest you’ll get charged.

Don’t push yourself though. Remember that forcing yourself to do more what you can do will diminish your positive attitude.

When this happens, you will find yourself running into other financial problems that may include more than just the loan itself.

It is important to start gradually. Start with a small amount and gradually increase it over time.

This way, you can gauge as to how much you really can afford on extra payments without sacrificing other important things in your life.

 

5. Understand your loan and create a plan.

Effectiveness Level: Normal-High

You need to understand your student loan properly.

What is going to be your monthly installment? How much extra will you be able to pay to get rid of it faster?

Plan it all! Having a plan in front of you constantly reminds you of the things that you need to do and worry about. This is why a lot successful people have planners with them. They plan everything.

However, this tip gets effective according to your plan. Your plan needs to be executable.

Just because you need to create a plan doesn’t mean you just need to create a plan regardless of how difficult or easy it is to execute.

Create a realistic plan. Don’t plan on paying $10,000 a month on your loan when you only have $1,000 in income every month.

Read: 25+ Survey Sites That Will Add $600/Month Or More

 

 

6. Make ensure your extra payment is not considered as next month’s installment.

Effectiveness Level: Low

This tip is to help you from getting fooled.

Many times, an extra payment is not established as an extra one but is used as next month’s advance payment.

This doesn’t necessarily mean you are paying your loan early to help you reduce the life of the loan as well as the interest payments charged.

Not at all! Well, not always.

Make sure that when you pay, you tell the customer representative that the additional payment is an extra payment on the principal.

If you pay online and don’t know where to apply the extra payment to go as principal, always ask your customer representative. Never assume the loan company will apply the payment straight to principal.

Read: 11 Ways To Pay Off Debt Fast

 

7. Take a job that offers student loan forgiveness.

Effectiveness Level: Medium-High

There are some jobs or companies that will help pay your student loans. This is by far one of the best ways to pay off student loans faster.

When your company offers student loan forgiveness, make sure you understand all the requirements and qualifications. Never assume you are qualified just because you are an employee of the company.

You need to understand one fact, that is, that your loan won’t be forgiven, until and unless you fulfill all of employer’s or job requirements.

 

8. Invest your raises in the right place.

Effectiveness Level: High

If you have student loan burden sitting on your shoulders, make sure you make the most of the income from your job.

When you consider and take a job, look whether the company gives yearly raises or not. Most of the companies do.

Whenever you get a raise, you should invest it in something that will add value or help you achieve your goal (e.g. pay off student loans faster).

Instead of buying a television, a new fridge or maybe a new laptop for yourself, why not invest in the stock market and use whatever you earn there to pay off student loans faster.

Or you can simply use the raise to make extra payments on your loan.

I am not saying that you should invest all of your raise in paying off the student loan. You may invest 50% or whatever you are comfortable with and the rest to pay off your loan.

Investing in the right place at the right time is an art that successful people have mastered.

Read: Investing For Beginners: Simple Tips To Follow

 

9. Don’t pay attention to repayment programs.

Effectiveness Level: Medium

When you carry a student loan, you may sometimes be desperate to pay it back, too.

Paying it back is nothing less than a nightmare, isn’t it?

Don’t fall for early repayment programs or too-good-to-be-true programs because they may just be scams or may put you into a lot of more problems.

While many repayment programsare legitimate, many of them will help you decrease your monthly payment. But it comes with a catch, that is, your loan will be extended far beyond what your loan currently projects.

You may end up paying more than what you can afford in the long run.

When you are offered repayment programs, make sure you fully understand the ins and outs of those programs. The more you know about them, the better decisions you can make to pay off student loan faster.

 

2. Have a positive outlook in life (i.e. positive attitude).

Effectiveness Level: Medium-High

It may sound simple but a positive outlook in life or having a positive attitude on how to pay off student loans faster can make a big difference in your student loan repayment efforts.

Your attitude decides how much energy you want to exert in whatever it is that you do (in this case, paying off student loan faster). Your energy decides how far you want to go and what other steps you can do more to get better results.

When your energy or determination is high, your positive attitude will affect how you create your plans and how you execute them.

I know, for a lot of people the thought that these simple changes in attitude can make a big difference sounds silly. But they work.

Calming down, telling yourself that you will be able to pay off student loans faster, and keeping faith on that thought can and will help you achieve your goal.

When my wife and I were paying off our debt (not necessarily student loans), we changed our view about money and debt. We had that view for so long that paying off our debt became uncomplicated and easy to do.

We were debt-free in just 2.5 years. We paid off $40K of debt and saved $70K, at the same time, in 2.5 years.

Read: How I Paid $40K Of Debt and Saved $70K in 2.5 Years

 

11. Switch gifts for money.

Effectiveness Level: Medium

There are a lot of festivities that come around the year apart from your birthday.

For instance, you get tons of gifts on Christmasor New Year’s Eve and sometimes, you don’t even need those.

So you can tell your close friends and family to give you cash instead of gifts. Be practical and let them know what your needs especially when they ask what it is you want for the holidays.

This will help you pay off student loans faster.

Its effectiveness depends on how much your family pays you and also how many of them consider it as well. Just because you say that you want money as gifts doesn’t mean that they will give you money.

Final thoughts:

Student loan is a burden, a burden that’s hard to get rid of.

However, if you are really motivated to get done with it within your college years or even faster, then these tips can or will help you along the way. Stay determined and create a plan that work efficiently for you.

Stop falling for programs that just tend to linger on your repayment plan for years. Know where to invest your money to help make money so you can pay more towards your student loan.

You have so many things to do and so many options to choose from. Always be creative and find ways to pay off student loans faster.

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What have you done to pay off your student loans faster? Do you have any tips that can help others pay off theirs faster? 

Allan Liwanag is a personal finance blogger who paid off at least $40K debt in 3 years by adopting simple and extreme saving techniques while ensuring his family’s needs were taken care of. An analyst by day and dedicated blogger by night, he loves to share his thoughts – based on his research, personal knowledge, and experience – on topics related to family, life, and money. Allan lives with his family in Maryland, USA.

2 Comments

  1. Michelle June 16, 2017