Disclosure: There are some affiliate links below, but these are all products I highly recommend. I won’t put anything on this page that I haven’t verified or personally used.
Are you living the life you dreamed of when you imagined what would unfold to be your adulthood?
Did you picture exciting world adventures? Maybe you wanted financial stability with a well-paying job and a picturesque house in the suburbs.
Are you living your dreams? Or is the perfect life you want hiding under a mountain of student loan debt?
Student loans plague 1 in 4 Americans and amount to $1.5 trillion according to Forbes. On average $37,000 is owed per student. Those are terrifying statistics.
For you to achieve the life you have always wanted, you need to consider ways to pay off your student loans faster. You will need to take a more aggressive approach than just paying your monthly minimum amount.
Pay Off Student Loans Faster
1. Consolidate & Refinance
When you consolidate and refinance your student loans, you will be able to save a big chunk of money in interest. You will no longer be spreading your wealth out paying on several loans that each carries a separate interest rate. If you are paying 6.25% across three student loans, 18.75% of your loan payments are going to interest. Instead, you could be applying more of your salary to your loans and lowering your balance.
Refinancing also applies when you only have just one loan. You could potentially get a lower interest rate, in turn, lowering your balance as more of your payment goes towards the principle of your debt.
2. Apply Raises To Loan Debt
You’ve been working hard and feel that any raises you are going to receive would be perfect for funding a nice vacation or maybe a wardrobe update. However, consider applying your raises to your student loan debt. Paying more towards your student loan debt can be easily automated. Just increase your automated loan payment amount with either your financial institute or the company drafting your loan payment each month.
The nice thing about applying your raises to pay your student loans off faster is that you are spending money you know you can live without.
3. Apply Cash Windfall To Loan Debt
While it may be tempting to use your tax return towards purchasing a bigger tv or redecorating your master bedroom, it could be used to pay down your student loans. By doing this, you will reduce your loan balance and be saving money on interest.
This goes for any large lump sum payment you are expecting. It could be a work-related bonus or inheritance or an insurance payout.
Using a cash windfall means you can pay down your student loans faster without necessarily having to work harder to do so.
4. Make More Than The Minimum Payment
Making more than the minimum payment goes hand in hand with the Debt Snowball Method of eliminating debt. If you are familiar with the Snowball Method, you already know that making more than is required will ensure that you will be getting out from under your student loan debt faster than only making the bare minimum payment.
In the example below from Lauren Greutman, you can see just how the Snowball method works. The diagram makes it clear how much faster you can eliminate your debt, not only student loans, by making more than just the minimum payment.
5. Find Ways To Save Money
If you feel as if money is tight look for ways to cut expenses in your budget. The savings will help you accomplish making more than the minimum payment on your student loans. Do you feel like your budget is as trim as you can get it? The Ultimate Money Saving Guide will help you find more ways you can save.
By making small changes, you can make a significant impact on your financial situation. Maybe you eat out less or lower your data package on your cell phone plan. To get out from under your student loans faster doesn’t mean you have to go without some indulgences. Start small and plan some splurges that are within your means. You will make headway on your student loans and still feel like you can live a little.
6. Make Extra Money
One way to get rid of your student loans faster is by making more money and using those funds to pay down your debt. With the rise in popularity of side gigs, there is no shortage of options for you. A lot of the extra money making opportunities can be performed from the comfort of your own home and on your own time.
Elna over at Twins Mommy has put together a fantastic list of bloggers who focus on helping those looking to make extra income from home. If you are interested in exploring what is out there, you certainly won’t be wasting your time here.
7. Stay Motivated
Paying off your student loans a little faster will still take some discipline. It will be vital for you to keep your end goal in your sights at all times.
Create a vision board with some ways you can reward yourself once your student loans are gone. Have a conversation with friends and family, so they know your goals. If they understand what you are working towards they have the opportunity to be more considerate when asking you out to eat or taking shopping trips.
Owner @ Freestyle Boho