I live in Denmark where student loans aren’t as big a thing as in the US. However, people still graduate with loans. Nothing hurts more than to see people graduate with huge amounts of debt. Debt is an emergency and you need to get rid of it fast.
Are you one of those graduates? Are you ready to pay off student loans for good?
It’s every broke graduate’s dream to put their loan debt as far behind them as their 8 am classes. The reality is that despite loan repayment banking on a 10-year term, the average bachelor degree holder isn’t free and clear until 21 years later.
There’s hope: you’re in complete control when it comes to getting out of student debt faster.
If you’re ready to kick your student loans to the curb, put these five expert tips to good use.
Pay More Than the Minimum
It’s the same with any loan: pay more than minimum to grind down the total amount owed. Not only are you paying off your loan faster, but also cutting your interest payments.
Though you may not have the funds to double or triple your payment each month, adding a little to each payment can significantly reduce your cost in the long term.
Try tacking on an extra $25 or $50 with each payment and watch how your loan balance declines.
Make Payments During Your Grace Period
When you graduate, loaners often grant you a grace period before you’re required to start making payments. Don’t sit on your hands during this time!
This grace period is your chance to figure out a repayment strategy. Calculate your payments and start contributing as soon as possible after graduating.
It’s a good way to get into the habit of setting aside money for your loan payment each month. If nothing else, it cuts a little time off your repayment schedule.
Stick to the Broke College Student Budget
As a college student, you may have been in the mindset of being broke. Keep this budget-friendly mentality going, even if you land a good-paying job.
Carefully considering every expense can help you spend frugally. If you focus on paying off your loans, you’re better able to forgo excessive or unnecessary spending on other things.
The more of a bare-bones budget you can muster, the more money you’ll have to put toward your monthly student loan payment.
Embrace the Gig Economy
We’re living in the era of the side hustle. It’s never been easier to get a little extra cash, which is good news if you feel like you’re drowning in student loan debt.
Driving for Uber or Lyft, delivering food for restaurants, or offering grocery services might not sound sexy, but you can make some decent money.
Know Your Tax Benefits
It might not sound like much, but in several countries you can deduct student loan interest payments from your annual taxable income.
Whatever money you save on taxes can be put toward your student loan.
Pay Off Student Loans in Record Time!
There’s nothing sweeter than that moment you finally pay off student loans. But to taste that moment faster, you’ll want to start practicing the five tips above sooner than later.
Remember, every dollar makes a difference. It still might take you a while to pay back the money you borrowed, but any progress is good progress 🙂