Are you feeling burdened by student loan debt?
According to this Wall Street Journal article, among 2015 college graduates, the students that graduated with student loan debt will owe an average of $35,051 in student loans.
I hope that number made you cringe. College degrees can be highly beneficial, however they do come with a cost. The College Data website tells us that the average price for a year of in-state tuition at a public college is $24,061 for the 2015-2016 school year. At that price, college-bound students (or their parents) can expect to shell out over $100,000 for a four-year degree.
If you are in a position where some of that money needs to be taken out in student loans, you could be looking at 10+ years of loan payments in order to pay for that college degree. There are several ways for students to lower their college tuition bills, however if the damage is already done and you’re facing student loan debt, you can save thousands in interest fees by paying back student loans faster.
Tips for paying off your student loans quickly
If you’re searching for realistic options to help pay down student loans faster, here are some ideas that can help save money in interest charges and get those student loan bills off your back faster.
Double your payment
Due to lengthy payback terms, the average payment on a student loan of $25,000 with a 6.8% interest rate and a 120-month term is approximately $287. If you’re willing to buckle down and double up on your payment, making a payment of $575 a month, you’ll finish paying that loan off in 50 months instead of 120 months, saving yourself nearly $6,000 in interest charges and cutting off almost six years of loan payments.
Although doubling up on student loan payments may seem like a mountainous task, it’ll likely be easier to do so right after college graduation than it will after marriage, kids and homeownership come into the picture. Doubling up on payments now gives you your best chance of getting those student loans paid off and out of the way as early as possible.
Take on a second job
Working a second job for as little as six to twelve months and putting the extra income toward your student loans can mean thousands of extra dollars toward student loan payoff. If you work ten hours a week at a second job paying $15 an hour for a year, you’ll have over $7,000 in extra payments to put toward paying down student loans early. Many types of secondary jobs are available these days for those who want the work. Some ideas of second jobs for the student eager to be free of student loan debt quickly can include:
- Restaurant jobs such as wait staff, host, cook or pizza delivery
- Evening or early morning jobs at company call centers
- Online freelance jobs such as virtual assistant positions or freelance writing opportunities
- Business ownership opportunities such lawn maintenance or pet sitting
With a little effort, some hours put in to finding and holding a second job can save you years of time when it comes to paying back those student loans.
Cut unnecessary expenses
Many college students are used to living on a shoestring budget. If you can manage to keep that “shoestring” mentality once you’ve graduated from college and are working a full-time job, you can use your newfound income to destroy those student loan balances quickly.
Here are some idea for cutting unnecessary expenses.
- Live at home with parents for a period of time or find ultra-cheap housing.
- Keep entertainment costs to a minimum and look for free or cheap ways to hang out with friends.
- Avoid advancing your lifestyle just because you’ve got a real job.
- Keep driving your current car, wearing your same clothes, etc.
- Weigh every potential expenditure against the measure of “necessity”. Keep non-necessity purchases to a minimum, knowing that the strict budget is only for a short period of time, after which you’ll have loads of extra money thanks to having eliminated those student loans early.
As you work to cut unnecessary expenses, make a commitment that all leftover monies at the end of each month will go directly toward your student loan balances and eliminate those balances quickly!
Remember that every dime adds up
It’s easy in today’s world of instant gratification to tell yourself when making a spending decision that “it’s only $5.” Or twenty dollars. Or fifty dollars. The use of debit and credit cards in today’s world of convenience has a way of detaching us from the real value of the money we’ve worked so hard to earn.
Whether you’re talking about saving money by cutting expenses, or spending money on unnecessary items that could be used to help you eliminate student loan balances faster, it’s important to remember that every dime that you do put – or don’t put – toward student loan bills adds up and makes a major impact quickly. Spending money that could be used to put toward debt will help ensure that your student loans are not paid off as quickly as they could be.
Each and every dollar and dime that you save by following the tips above will add up quickly. As you make it a practice to be intentional about putting those dollars and dimes toward your debt, you’ll be surprised at just how quickly those loan balances disappear.