Getting an education is one of the most important things you’ll ever do in your life. As such you want to put your best foot forward and go all-in on a student loan to make sure that you have all the resources you need to get your degree. There are many people out there who have large student loans and fear they will be with them for a lifetime, but with careful planning, and a positive attitude, you can clear that student loan quickly.
Many people think that they cannot clear their student loans, but it is possible even if you owe into the hundreds of thousands of dollars. Corey Advisors is in the business of financial management and planning and has put together a list of tips to help you pay down your student loan as fast as you can.
Get on a budget!!!
Now, this may seem like a no-brainer, but if you are staring at all of your bills and wondering how you are going to make your student loan payments, maybe you need to sit down and make a budget. With a budget, you can see where your money is going and figure out where you can cut some fat and look for better ways to spend your money. The ideal budget should have 33% of your income for rent or mortgage, then you should account for the other necessities such as utilities. After which account for grocery money then figure out the best way to allocate the money for your debt.
Most people who sit down to do a budget are shocked and surprised by their spending habits, but in this rampant consumerist society it is easy for us to lose sight of what is important and we spend to make ourselves feel better.
Having a budget doesn’t mean that you are going to pay your student loan debt down faster, it just means that you know where your money goes. You are the only person who can make sure that you hold yourself accountable and make extra payments to your student loan. No one can force you, but if you tell your friends and family your plans, perhaps they can hold you socially accountable and allow you the strength to do the right thing and get out of debt.
Pay money on the principal, only
Once you’ve paid the minimum payment to your student loan every month, many companies will reward you by allowing you to pay to the principal only. This money is not eaten up by interest and is an extra payment or boost against the balance owed.
In essence, many of these companies do not like you to pay to the principal because it eats into their profit margin, which is the interest. But if you were to pay an extra $300 a month on a loan that is around $80,000 that would save you around $3,000 of interest over a 10-year period.
Suffer now and reap the rewards later
If you want to pay your loan off fast; you are going to have to make some sacrifices. Those sacrifices might come in the form of Netflix or other subscription services or anything else that is not essential. No one likes to go without, but if you are to succeed in getting your student loan paid off, then you need to make some small sacrifices now to reap the rewards in the future and enter retirement debt-free.
Use the money saved to put against your loan. Any amount you pay, even a dollar, is one dollar closer to getting that monkey off your back.
Look for a lower interest rate
Now, this depends on your credit, but if you have good credit and a good job, you may be able to refinance your loan for a lower interest rate. In reality, it is not the amount of money that you owe that hurts you but the interest rate. With a lower interest rate, you could maintain the same payment that you were at a higher rate and get the loan paid off faster.
Get a second job or freelance from home
If you have the time and the ability to get a second job, then this would be a great way to boost your income and you could use all the money from that job to pay against your student loan. Think about this, if you worked for say 16 hours a week in a second job, then you could have at least another $400 (depending on the minimum wage) to put towards your student loan.
There are lots of different ways that you can pay off your student loan faster but with the right tools and the right guidance from a financial planner, you will be better equipped to pay off your student loan and maybe even set some goals for your future and your retirement. With the help of Corey Advisors, you can obtain the peace of mind that you need to travel down the road to financial freedom.