There are plenty of things that are worse the longer you put them off and the slower you do them. For example, pulling a Band-Aid off is much less painful when done quickly. Student loans are another one of those things that are much better when paid as quickly as possible. Even if it’s more painful in the beginning, it will be over sooner and you will find yourself not having to deal with the stress of student loans for a prolonged period of time. Keeping this in mind, here are seven ways to pay your student debt as quickly as possible.
Be Informed and Create a Plan
In order to get rid of all of your debt, the first step is to fully understand it. It is a good idea to sign up for a loan management program that will allow you to see all your loans in one interface. This will keep you organized and see the exact amounts that you owe and to whom. Once you have a firm grasp on the amount that you owe, you will be able to create a plan of action to pay them off. There are plenty of strategies to pay off student debt, however the debt avalanche plan is highly recommended. This plan requires that you pay all of the additional funds on high-interest loan first.
Pay as Early and Often as Possible
You don’t need to wait until you graduate to start paying off your student loans. If you have a part-time job during the school year and full-time job during the summer then you should devote some of the pay towards your student loans. On top of this, any extra money that you received such as birthday money, Christmas money or tax refunds should be put towards paying down your student debt.
Look at Repayment Programs
If you feel as though you’re in over your head with student debt then it is recommended that you look into jobs that have student loan perks. Some government and military jobs will repay a percentage or sometimes a set amount of your tuition for every year that you are in service, and so your balance will decrease every year. You may also want to look into public service loan forgiveness if you are eligible, as it will completely eliminate your remaining balance after ten years of being in service. However, keep in mind this is a long commitment to make.
Work More and Party Less
Everyone needs their fun every once in a while, but you should limit this if you want to get your loans paid off as quickly as possible. If you are able to get overtime at work or obtain a second gig to earn money on the side then this is highly recommended, even if you have to sacrifice some down time. Not only will you be making extra money, but you will also be able to limit the extra expenses of going out on the town. Think about how every movie or night of clubbing you skip is less time paying off your student debt.
Pay More Often
If you receive a pay check every other week instead of once or twice a month then you will be able to make an extra student loan payment every year in order to lower the overall interest that you pay. It is recommended that you set up an auto-debit in order to automatically make a loan payment every payday. This will allow you to cut down your interest as it won’t accrue quickly because of frequent payments, and will also result in one extra payment each year.
Tell your family members and friends that frequently give you gifts on your birthday and Christmas to instead to put money towards paying off your student debt. It is a good idea to create a PayPal account that will allow you to deposit money into, or they can just give you cash. It’s recommended that you’re honest with them and tell them exactly how much you borrowed in order to enroll in school and how it’s impacted your life. Make sure that they know the best gift they can give is your peace of mind in knowing that all of your loans are paid off.
Tap Into Taxes
When you are filing for your annual 1040 make sure that you take out a student loan interest tax deduction. This will bump up your tax refund, which you should put into paying of your student debt. By taking the lump sum of your tax refund and devoting it entirely too high interest rate loan you can put yourself on the fast track to being student debt free. Make sure that you tell your lender that you want your entire payment to be put to the principal.