Are you sick of seeing that massive debt number when you check your student loan account? When you brave clicking through your credit report online, do you cringe at the sight of what you still owe before you can truly be debt-free?
If so, you may want to learn how to pay off student loans faster. We've gathered some strategies for reducing that amount quickly, and eventually paying it off entirely. For this week's blog, we're going to cover eight tips for paying off your student loans ASAP!
1. Pay More Than the Minimum
Maybe you feel relieved when you see a minimum payment amount for your student loan bill each month that falls on the low side. It definitely relieves the stress of allocating more money to your bills each month in your budget and allows more freedom to live the way you want to.
However, that minimum requirement is just that: a minimum. When you learn that it will take you 20-to-30-plus years to pay off your student loans, that figure is based on an assumption of you paying the minimum only.
In other words, you should always pay more than the minimum payment due on your student loan bill. Whatever extra money you can throw at that big, scary number, the better.
2. Make Lump-Sum Payments Whenever Possible
Just received your holiday bonus? Did a family member leave you a sizeable inheritance?
Maybe you just sold a car, your home, or some collectibles and have more money than you need to survive. No matter the case, when you come across more money than you expected to have, you should use it on paying down your student loan debt.
3. Schedule Bi-Weekly Payments
Student loans never assess prepayment penalties. In other words, paying before the bill is due can be an exceptionally wise habit. Additionally, when you pay your bill multiple times in the same billing period, you will chip away at the total a whole lot faster.
For instance, if you only paid the minimum payment each month during a year, that comes out to 12 payments. By raising that number up to 16, 20, or 24 payments, you will pay the debt down far faster. Yes, you will spend more money, but such a strategy can be seen as an investment in a debt-free future.
4. Consider a Career in Public Service
Once they leave college, many former students seek careers as teachers or other government employees. They need to meet the specific requirements of the public service loan forgiveness programs, but if they do, they can eliminate most if not all of their debt without paying a single dime.
The downside of these programs is that you have to really desire a career in public service. If you don't, you may find yourself spending 5-to-10 years in a job you never truly enjoy. But once your term is over, you are free of debt and able to seek out the career you really want with a healthy job history on your resume.
5. Create a Monthly Budget
If you are a frequent reader of the Atlas Credit blog, you know we advocate for making a budget. When you budget your monthly expenses, you can see where to find extra money to go to paying off student loans fast. Your budget should include:
- Utility and rent or insurance costs
- Entertainment costs, including dining out and subscription video services
- Groceries, gas and other necessities
Once you have this written down, see where you can save money. Maybe you don't need three video subscriptions. Perhaps you can stop eating out for a few months. Even reduce your grocery budget by cutting coupons. You can find many ways to save when you know what you are spending, and all those savings can go toward paying off college loans.
6. Put Bonuses and Tax Refunds Toward Your Loan
One of our top tips for paying off student loans is to put any extra money you receive toward loan repayment. Taking this approach is so effective because it's really found money. If you aren't counting on this "found money" to pay your bills, then sending it all toward your college debts won't hurt your budget and won't leave you feeling deprived.
Do you get Christmas bonuses or extra money for working overtime? Put it toward your loan repayment. Receive a tax refund? Same thing. These significant payments make a nice dent in the amount you owe, too.
7. Get a Second Job
One of the best ways to pay off student loans is to have more money to put toward repaying your debt. You get more money by making more money. Adding just five to 10 extra hours per week at a part-time job or side hustle you can do from your home can take you closer to paying off your student loans.
A side hustle can be something you feel passionately about. It won't even feel like work because you like it so much. When you choose your side hustle, think about finding something that doesn't cost much to start. You don't want to have to pay for supplies. You want everything you make going toward extra money to pay off debt. Here are a few ideas for easy and enjoyable side hustles:
- Work for a rideshare service
- Walk dogs
- Babysit or housesit
8. Refinance Your Loans
Another way to make your student debt burden simpler is to refinance the loan. This process allows you to pay off your current student loan by assuming a new loan with a significantly lower interest rate.
Remember, though, as you consider our student loan payoff tips, that once you refinance through a third party, you will no longer have access to income-driven repayment and student loan forgiveness programs offered by the government.
Need help making a student loan payment that catches you off guard? Or maybe your student debt burden has interrupted your regular financial flow and you need money now to handle other responsibilities. If so, consider applying online for a quick and easy personal loan from a bad credit, low credit, no credit lender like Atlas Credit today! Apply online or visit any of our offices throughout Oklahoma and Texas.