6 Outrageous Ways to Pay Off Your Student Debt FastNov 09, 2021
Every self-responsible student tries to cover their education by hook or by crook. If it even means taking loads of student debt, you'll go for it. However, you might have this stressful thought of getting done with your student debt once you graduate. These miseries can cause depression and make your life a living hell.
Well, you're not alone in this mess. According to a report, around 54% of college students take debt for their education. However, most of them struggle with it their whole life.
Well, here I have compiled the best Six incredible tips to help you pay off your debt quickly.
Let’s dig in.
Avail State Resources to Pay Quickly
Many governments are proactively working to provide relief to students. The US government has set up an organization that provides public sector loan forgiveness (PSLF) reliefs to students who work in the public servant sector. These forgiveness loans are also available for the military and teachers.
Now, how can you get these reliefs? You can simply visit the student aid website and apply for these forgiveness loans. To qualify for the PSLF website and apply for these forgiveness loans. To qualify for the PSLF, there are the following requirements:
- You need to make 120 monthly payments
- Your payments should be under the income-driven repayment plan
- You must work full-time
- You should be employed in the public sector
Once you fill out the PSLF form, you'll soon receive the letter, and the government will cancel your entire debt after 120 payments. As a result, you can get done with your debt in half time.
Besides, if you can't qualify for PSLF, you can always go for reimbursement programs. You can contact your employer and ask him about student loan benefits. Many employers can give you the benefit of taking care of your student debt. You just have to ask and work for it. Moreover, the US CARES act instructs employers to allocate $5250 per employee for student loans.
Apply the Unique "Found Money" Approach
Found money is a very interesting approach to follow. In simpler times, you should put any income you earn apart from your fixed monthly income to pay for debts. Some sources for "found money" include tax refunds, rebates, bonuses, benefits, or side income.
All of these are factors which can get you extra money. How can you avail them? Firstly, check out whether you can get student relief from your employer. If you can, apply for it and use it for your income. In many cases, you get tax refunds and put them to settle your debt first. Sometimes, you hit a target at your job and get stellar bonuses. You can use those bonuses to settle your debt first.
Primarily, it would be best if you allocated them using the 50/30/20 approach, with 50% contributing to your debt. Constantly applying extra money to your debt will help you to settle it much earlier.
Start Paying Early in Your College Years
According to one report, around 53% of students don't know that interest accrues on their loans. Unless it's a subsidized debt, the interest will accrue each month while you are in school or in a grace period, forbearance, foreclosure, etc. As a result, all of this interest is capitalized and adds to your loan balance.
So once your repayment starts, you'll have to pay interest on a much larger amount.
The best thing you can do is pay a sum equal to or more than the monthly interest before the repayment period starts. In this way, you can avoid prolonging the term of your debt and repay it quickly.
Refinance and Save
Refinancing is one of the favorite methods of financial coaches. If you don’t know what it is, refinancing means taking out a loan to pay for all previous loans under new terms and conditions. Check out Bankrate to learn about the current interest rates.
The best benefit of refinancing is that you pay a single lump sum loan at a lower interest rate. Moreover, you also have the option to get a lower term on a loan. With the interest cost savings, you can apply them to your debt and repay them in a much shorter period. So, if you have some high-interest loans, you can visit private lenders to fill a refinancing application.
The process is simple: you’ll have to fill in an application and if your credit score is reasonable, you’ll qualify.
#1 Tip: Strategically Pay More than the Minimum
There's no restriction to pay a fixed amount on student debt. One of the smartest ways to get done with your debt is to pay more than the minimum amount on your loans. Be it $100 or $200; any additional payment will help you reduce your debt.
There are two best strategies for you to try:
- Avalanche method: if you have several student loans, list them down in ascending order in terms of interest rate. Consider paying an extra amount on a loan with the highest interest rate. Once you get done with it, move to the next.
- Snowball Method: list your loans in descending order in terms of amount. Try to pool in extra money in the loan with the smallest amount.
No matter which method you try, you have to pay extra each month to get rid of your debt soon.
A Tip: always tell your lenders to adjust the extra payment for the principal instead of next month.
Design Your Budget
The best way is to stick to a personal plan and be consistent in your approach. Use the 50/30/20 approach of budgeting which is as follows:
- 50% Essentials
- 30% Needs
- 20% Savings
This is a typical approach, and you can mold it per your goals. Look for ways to reduce the debt soon. Increase the allocation on debts and find ways to get discounts. Some of the ways are:
- Auto-pay for student debt can allow you to avail of 0.25% deductions in rates and generate savings.
- Tax brackets allow you to deduct $2500 student debts from your taxable income.
- You can even get a side job to earn money for settling debt quickly. Some examples include tutoring at Chegg or freelancing platforms.
Changing your lifestyle and setting your priorities will help you save more and pay off your debts faster.
Living a financially independent& debt-free life is a typical goal for any individual. But the thing is, it’s not easy as it sounds. You may easily distract and drift from your path. Because we are all humans and we tend to change our decisions based on our emotions and wants. This is why many financially successful people recommend getting a financial coach to help ease the process.
As a financial coach, I aim at helping professional women like you pay off their student debt fast with my revolutionary methods and strategies. These are the strategies that are currently working and have helped hundreds of women like you before. So, if you think you need a partner who understands your finance and your circumstances then don’t hesitate to take me on this. Let’s have an honest and non-judgmental conversation about how you can shape your finances and reach the goals you always aimed for. Simply, sign up for your free consultation here and let me help you pay off your student debt fast.
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