Apply ‘found Money’ To Loan Balances
Found money doesn’t necessarily mean the change you find between your couch cushions. But it does include money that isn’t budgeted for as part of your monthly income. Using found money is another way to gain traction with student loan repayment. This includes:
- Tax refunds
- Income earned from a side job
- Cash gifts you receive for birthdays or holidays
You can apply these amounts to your loan principal to take out a chunk of your debt in one go. Other opportunities to use found money to pay down loans quickly include inheriting money from relatives or receiving a settlement as part of a lawsuit.
Federal Vs Private Loans
Not all student loans are created equal. There are federal loans and private ones, and generally speaking, you’re best off avoiding the latter at all costs.
Federal loans are issued by the government, which means their terms, including their interest rates, are regulated. Federal loans also offer a number of key protections for borrowers who find themselves struggling to keep up with their payments. For example, if you have federal loans, it’s possible to apply for an income-based repayment plan so that your monthly obligations reflect your ability to pay. It’s also possible to defer your federal loan payments completely if you’re experiencing a true financial hardship.
Private loans, by contrast, are issued by private lenders, and as such, they aren’t regulated the same way federal loans are. Private lenders can charge as much interest as they want, and they’re not required to give you a break if you you’re struggling to keep up with your payments.
If much of your student debt comes in the form of private loans, on the other hand, then you’re potentially looking at a much lengthier repayment period. The terms of your repayment plan will depend on the specifics of your loan, but it’s not unheard of to repay a private loan over 20 years or more. If that’s the case, then it generally pays to knock out some of that debt sooner to avoid racking up mounds of interest charges. The key, however, is to balance your loan payments against other important financial matters.
Cons Of Refinancing Student Loans
- If you refinance federal loans with a private lender, you lose access to federal income-driven or income-sensitive repayment plans, deferment, or forbearance
- Lose federal loan forgiveness option for borrowers working in certain government, military, education, health care, and nonprofit jobs
With Credible, you can compare student loan refinancing rates without affecting your credit score.
Recommended Reading: Can I Roll My Car Loan Into Another Car Loan
She Set Weekly Goals And Celebrated Reaching Them
Clarke made it a point to set small, weekly goals to make her debt pay-off goal feel smaller.
“I didn’t look at the big picture of $6,000, because that seemed too big,” she said. “So I focused on how much I was going to pay off each week. I wrote it on that spreadsheet that I had, and that just seemed way more attainable.”
She kept herself motivated by rewarding herself for reaching those weekly goals. “I celebrated in some way. I didn’t do anything extravagant. I didn’t go buy anything fancy. But I just made sure that I stopped and I thought about it, and I really just appreciated that it happened.”
It made a big difference in motivating her to keep chiseling away at her debt. “You just kind of feel that good feeling that you’re actually getting through your debt,” she said. “That good feeling carries you through to take on the next week.”
Attending Grad School Meant Even More Debt
I graduated in 2008 at the height of the financial crisis. Jobs were scarce, and I was convinced that my long-term career prospects were grim with just an undergraduate degree. I was also sure that the entry level salary I commanded at 35k would never be enough for me live on and pay off my hefty student loans.
Of course, my solution for this was to go back to school and rack up even more student loan debt!
I went on to get MBA in Finance, also at an expensive private university. While in school, I made another big mistake of deferring all of my student loans. Because all of the loans were unsubsidized and private, I continued to rack up staggering amounts of accrued interest.
Even though I worked two jobs in high school, almost full time in college and through my MBA to support myself,
On the one hand, I was extraordinarily proud of myself from graduating with both my undergrad and masters, coming from a background with almost NO formal education.
On the other hand, I was terrified that I would never pay off this crushing debt.
But wait, theres more! All through school, I drove complete beater cars. No joke, in grad school, I bought a car for 250 bucks off sites like Craigslist. It amazingly lasted for over a year, but I did keep AAA on speed dial. The stupid thing was always breaking down on my way to class or work.
So at 25, I had managed to rack up 160k in debt. My heart still stops a beat just thinking about it!
Recommended Reading: What Is The Best Debt Consolidation Loan Company
How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
Compare Student Loan Refinance Lenders
Once you have all of your student loan debt gathered up, the first thing you will want to do when looking to refinance is to compare lenders. You can compare interest rates, repayment terms, and other benefits such as interest rate deductions for enrollment in automatic payments, cosigner release, and customer service.
Don’t Miss: When Will I Receive My Student Loan
Ready To Get Serious About Paying Off Your Debt
If you are ready to get serious about paying off your debt, saving more, and spending less, check out Jordan Pages Budget Boot Camp.
Jordan is a budget guru who paid off her familys $10,000 debt in 13 months and teaches others how to do the same.
Her program is a fun way to Whip Your Wallet Into Shape!
Check out Budget Boot Camp and Use the Promo Code GIGGLES for 10% off!
You May Also Like
Types Of Employer Student Loan Repayment
Its somewhat rare for companies to pay student loans pet insurance is almost twice as common as a benefit, for example, according to the Society for Human Resource Management.
Because employer student loan repayment is uncommon, theres no standard program structure or rules. Here are some types of assistance a company may offer:
Employer student loan repayment programs are typically administered via a third party, such as IonTuition, Tuition.io, Gradifi, Fidelity Investments and Peanut Butter, that pay your student loan servicer directly.
Your employer may also partner with these providers for non-monetary services or additional features, like student loan counseling and refinancing bonuses. If youre considering refinancing student loans, be sure to compare multiple lenders offers to get the best deal possible.
Recommended Reading: What Happens To My Parent Plus Loan If I Die
Make Some Financial Sacrifices
Remember when I brought up sacrifice earlier? Like saying no to late-night fast food? Heres where it comes into play.
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. Do you have a guest room thats not getting much use these days? Rent that sucker out! Just think how quickly you could pay off your loans if your housing costs were cut way down.
How about selling some junk you dont need anymore? Dig through your closet, garage and storage to see what you could put on eBay, Facebook Marketplace or Craigslist. Then, add up what you spend eating out every week. Ditch the $7 oat milk lattes and brew your own coffee at home. Eat your leftovers or meal prep for the week instead of spending $1020 on lunch. Get savvy at the grocery store. Trust methere are plenty of creative ways to save. But it starts with being willing to make some temporary sacrifices for some long-term gains.
Make Sure Everyone Is On The Same Page
If you are married, you and your spouse need to be on the same page as far as wanting to pay off the debt and which method you are going to use to pay off the debt.
Working against each other will only cause frustration and make you give up before you have accomplished your goal.
If you arent married or in a committed relationship, you dont have to worry about this step. But even if its just you and your dog, let Spot know that you wont be splurging on high-end dog food or treats for a while.
Saying that you are planning on paying off your debt out loud will help you stay the course.
What To Do If Your Spouse Isnt On Board
I knew that I wanted to pay off our debt as quickly as possible but Ross wasnt entirely convinced.
He had heard that having student load debt was good debt and you shouldnt try to pay it off quickly.
So how did we get on the same page?
You May Like: How Many Times Can You Refinance An Auto Loan
Use Extra Cash To Make Lump Sum Payments
A LendEDU survey found that over half of student borrowers who are able to pay off their student loans in one to five years made at least one lump sum payment of at least $5,000, making this one of the best strategies for paying off student loans fast.
When you come into some extra money for example from a tax refund, dont spend the cash. Instead, put the funds towards paying off your student debt with extra payments or a larger payment. This will reduce the principal balance you owe, so it will reduce your interest and the outstanding amount you have to pay back.
S To Help You Pay Off Your Student Debt Quickly
Now that you can see the big picture, here are some actions you can take to pay down your student debt:
Enroll in automatic payments. Make sure you never miss a payment by setting up autopay. Late or skipped payments may incur not only additional interest but fees as well plus, they can negatively impact your credit report and push your repayment schedule back. You also may be able to save money with an interest rate reduction for enrolling in autopay.
Pay more than the minimum monthly payment. Paying even just a little extra each month will help you pay your loans down faster. Dont compromise your savings goals to achieve this rather, consider whether you can cut down on your discretionary spending to beef up your loan payments.
If you can pay more toward your loan, inform the servicer how you would like the funds to be distributed toward your loan balance. Otherwise, they may apply them to your next months payment and advance your due date, which does not help you pay the debt off faster.
Make biweekly payments. If you get into the habit of paying half your monthly payment every two weeks instead of making one monthly payment, you will end up making one extra monthly payment each year .
Stay committed to the cause! Staying positive and focused can go a long way in helping you make good financial decisions that support your goal of paying off your student debt.
You May Like: How To Pay Off Harley Davidson Loan
How Do You Pay Off Student Debt In The United States
Everything you need to know about paying off school loans
We all know how expensive it can be to study at a college or university in the US. The average student graduates with almost $30,000 in debt. Student loans are designed to help pay for the cost, but as the word loan suggests, the money will eventually need to be paid back. After graduation, a lot of students are left wondering, where to begin?
Look Into Forgiveness And Reimbursement Programs
Public Service Loan Forgiveness is designed to offer student debt relief for students who pursue careers in public service. You make a set number of payments while working in a public service job and the remainder is forgiven.
If you don’t qualify for loan forgiveness, you may be able to get help with your student loans through your employer. Talk to your HR department about whether student loan reimbursement is available as an employee benefit and what you need to do to qualify.
In some circumstances, a debt relief company can assist you in negotiating lower payments or even partial debt reduction.
The American Rescue Plan passed by Congress and signed by President Biden in March 2021 includes a provision that student loan forgiveness issued between December 30, 2020, and January 1, 2026, will not be taxable to the recipient.
You May Like: How To Reduce School Loan Debt
If Youre Having Trouble Repaying
If you need help with repaying your Canada Student Loan, you may qualify for the Repayment Assistance Plan .
If youre having trouble repaying a provincial student loan, contact your student aid office. For repayment assistance with a loan or line of credit provided by your financial institution, contact your branch to determine what your options are.
Understand that by making your payments smaller, it will take you longer to pay back your loan. Youll end up paying more interest on your loan.
If you consider refinancing or consolidating your student loan, note that there are important disadvantages.
If you transfer your federal or provincial student loan to a private lender, you will lose any tax deductions on your student loan interest. You wont qualify for the interest free period while you’re in school and will end up paying more interest over time.
How To Pay Off Student Loans Fast Increase Your Income Like Crazy
Well, sure making large payments sound like a great idea, but where the heck is the money going to come from?
That was a tough question for me.
I didnt have a real job and honestly, I didnt want to get one if that meant working some horrible, mind-numbing 9 to 5 job, so what to do?
I decided to create multiple streams of income.
The largest one was freelance writing. I talk about how I did that here. This is where most of my income started to come from after a few months.
I was quickly making $2,000 and then $3,000 a month just from this.
Trust me, it was a lot of work, but it was worth it.
I also sold old postcards and bookplates on eBay. A bookplate is a picture in an old book. I sold typed quotes on Etsy, and I started a blog.
The blog, of course, took some time before I saw any money from it, but after about 6 months I did start to see a profit and after a year I was making a steady stream of income from it.
I ended up selling it when I started this one.
So, I got my income up to around $4,600 a month.
Some months were a little better and some were a little worse, but that was the average.
Even so, that only left me an average of $975 a month to live on and pay my credit card bills.
I did find a way to reduce my credit card bills before I started to pay them off which I talk about here.
This meant I had to eliminate almost all of my living expenses
Recommended Reading: Where Do I Apply For Ppp Loan
Work For An Employer With Repayment Assistance
Employer student loan repayment assistance is growing in popularity as a workplace benefit. Employers who offer this benefit pay a certain amount of money towards employees student debt each month. Amounts vary, but typically employers offer around $100 to $300 monthly.
When you work for a company that offers this benefit, keep paying the minimums yourself and use the extra funds from your employer to pay down the balance more quickly.
How To Pay Off Student Loans Fast Set Fire To Your Living Expenses
Okay, truth be told, I didnt get my living expenses down to zero. I mean, I still had to eat, but I got them close.
At the time, I was living in Florida near an area with a lot of wealthy people that like to travel.
I realized that many of them didnt like having their expensive homes sitting there empty or they had a pet that they couldnt take but didnt want to put in a kennel.
I actually knew someone that fit this description, so I started talking to him about house sitting, and he set me up with my first house sitting opportunity.
I looked for people that were going to be gone for at least 2 weeks or more with a month or more as the best option.
Youd be surprised how many people travel for long periods of time
Anyway, it wasnt long before I was booked, mostly through word of mouth.
I did what I could to not have a gap between housesitting gigs, which wasnt always easy, but there werent many and when I did have one, I would stay with a friend for a day or two.
I didnt have a water bill or heat bill. I didnt even have to pay for cable or TV.
Not to mention, I got to live in some pretty swanky houses all around the coast of Florida.
That meant when it came to living expenses the only one I had was food.
I already had plenty of clothing and I actually sold my car which was paid off, to help reduce my monthly expenses.
Living in Florida, I did a lot of walking and bike riding and once-in-awhile public transportation.
Also Check: Does Fha Loan On Manufactured Homes
