Student loan debts in America continue to grow. The average student in 2019 has a debt of about $25,000 when they graduate from college.
Many student loan borrowers are finding it difficult to pay off their debts in a timely manner or manage them at all. In 2019, the average monthly payment for a student was approximately $311. This high cost makes it impossible for many young professionals to consider pursuing other goals in their lives.
However, there are ways to pay off student loans faster and make more intelligent choices along the way; here’s how.
Devise a Plan
The first step you will want to take to pay off your student debt is to create a plan that works with your spending habits and lifestyle. Next, decide on what you can manage each month and where you can get creative with cutting costs.
Figure Out Your Motivation
The second step you will want to take is to figure out your motivation for paying off your student loans early. What are your reasons? Why do you want to pay them off so badly? Once you know the driving force behind your goal, it will be easier to dedicate yourself to making it happen.
Take Advantage of Raises and Budget ChangesÂ
When you get a raise at work, consider putting that extra income toward your debt instead of splurging on something new or unnecessary. As with budget changes, any change in spending habits should be used as an opportunity for financial growth rather than wasted on frivolity.
Apply For Loan Forgiveness Programs
Another idea is to apply for any student loan forgiveness programs that may be available. For example, most federal government employers offer these types of programs to their employees, which can cut years off of payments and help you save money in the long run.
Consider Refinancing Your Loans
Refinancing your loans is another option. However, if you do this, make sure you are checking rates at multiple lenders to ensure that you are getting the best deal possible when it comes time to pay back your debt. It’s also essential when refinancing your debts to do so all at once instead of one-by-one because it will help keep payments manageable throughout repayment.
Use Extra Cash Wisely
When extra cash becomes available, spend wisely by using funds designated for your student loan debt. Don’t go over budget and start spending on items you can’t afford, but do put some of that money towards your loans if possible.
Make Paying Off Student Loans Your Priority
This may not be an easy step to take, but it could make all the difference in your financial life. If you can make paying off your student’s loans a priority when it comes time to allocate funds for everything else, consider applying any extra income towards repayment.
Negotiate Payment Terms With Lenders
If you have multiple lenders, consider reaching out to them one by one to see if they will negotiate payment terms with you due to economic hardship or other factors. This is an option worth exploring if you are struggling to make payments.
Look for Additional Sources of Income
While getting a second job may seem like the only way to pay off student loans quickly, you should know that it is not necessary. There are plenty of other ways to make money on the side, so consider trying something new first before you take on another commitment. For example, you can sell items around your home or acquire inventory for an online store through sites like Shopify, eBay, and Etsy or even join social platforms that encourage side hustles, such as creating Sugar Baby Profiles or signing up to UpWork, and Fiverr. There are plenty of opportunities out there if you take the time to look for them.
Work with a Loan Specialist
Additionally, consider working with a loan specialist who can help you assess your current situation and develop ideas for reaching your goal of paying off student debt. This may include strategies that have not been mentioned here, so it’s worth exploring every option available to ensure that you reach repayment as quickly as possible without sacrificing your financial health along the way.
The Bottom Line
Paying off debt can be a daunting task, but it’s one worth pursuing because the sooner you pay back your loans, the more money you can save by not paying interest. So whether you work toward paying off student loans early or overtime, make sure to put extra income toward repayment and not get in over your head when trying to make ends meet.