You can pay off student loans quickly if you put your mind to it. Of course, you’ll have to make some sacrifices. Nevertheless, if you want to make sure that those loans aren’t hanging over your head for years to come then the sacrifices can be worth it. Here are ten strategies to pay off student loans quickly:
1. Sell Everything You Don’t Absolutely Need
In particular, sell things that are costing you money. For example, sell your car. Use the money to pay off student loans. You’ll also be able to save money because you won’t have to pay for car insurance or gas. Get around on foot, bike, or public transportation until your loans are all repaid.
2. Reduce Housing Costs As Much As Possible
Get extra roommates. Move back in with your parents temporarily. Live in a tiny house. Do whatever you possibly can to reduce your housing costs to the minimum possible. That’s typically a person’s biggest expense so if you can cut it down then you can pay student loans off quickly.
3. Live in the Right City
People in these ten cities can usually pay off student loans within 4-6 years of graduating. You might be surprised by how great some of these locations are. They include San Jose, California and Seattle, Washington.
4. Pay Off Student Loans with Frequent Payments
Don’t just wait until your monthly bill comes due. Make payments as often as possible. The reason this is important is because student loan interest accrues daily. The longer you wait to pay it off, the more you owe. If you get paid every two weeks then make payments every two weeks. You might even set up automatic payments directly from you bank account to your student loan provider.
5. Pay Off Student Loans with the Highest Interest First
Double-check the interest rates on all of your student loans. Look into consolidating to see if you can get a lower rate. Once you’ve got the lowest possible rate, organize your debt repayment plan. Of course, you have to make the minimum payments on all of your loans. But make sure that any extra money always goes towards paying off the highest interest rate student loans first.
6. Use Your Tax Refund to Pay Off Student Loans
Anytime that you get a windfall of cash, make sure that you use it to pay off student loans. For example, when you get your tax refund, you should immediately use it to pay back those loans. If you get cash at Christmas, a bonus at work, or even accrue cash back credit card rewards, then you should always use them to pay your student loans.
Another option as far as taxes go is to change your withholding amount. Make sure that you have your employer withhold enough to cover your taxes but nothing extra. Then take that extra from each paycheck and send it to your student loan providers.
7. Work. A Lot.
Get as many extra hours as you can at your job (assuming you aren’t paid on salary.) Get a second job. Try out the gig economy. Earn as much as possible. Put all of that extra money towards your student loan debt.
That said, remember that if you make too much, you end up in a new tax bracket. Make sure you’ve accounted for that in your finances.
8. Cancel All Subscriptions
It’s easy to let those little costs add up. Cancel your Netflix and Hulu accounts. Definitely cancel your cable TV. If you subscribe to print magazines then cancel those. Go through all of your recurring payments and cancel as much as possible. Put all of that money towards your student debt. You were already spending it, so you don’t need it.
9. Pay Close Attention to What You Owe
The more intimate that you get with your money, the better your relationship with it will be. Therefore, you should sit down regularly to look at your finances. That means looking at your student loan debt. Create a repayment plan with a specific end date in mind. Track this on a calendar. If you know what you’re working towards, and you check on that plan regularly, then you’ll stay motivated to pay off student loans quickly.
10. Budget and Live Minimally
The best tips to pay off student loans quickly aren’t glamorous ones. In fact, they’re all about being practical. Budget your money. Stick to that budget. Live as minimally as possible. Use all of your extra money to pay off that debt. If you can sacrifice for a few years in order not to have to worry about that debt anymore, then you might feel a lot better in the long run.
- Is Student Debt Worth It? Mine Was. Is Yours?
- Beware: Student Debt Can Ruin Your Retirement
- How My Lifestyle Allows Me To Aggressively Pay Off Debt