To pay off all your student loan, it will require some distinctive efforts and focus. Indeed student loans in the US are one of the most important debts crisis of the century. Some key statistics:
- One in five adult Americans has a student loan.
- The total amount of student loan debt is $1.47 trillion in 2018.
- 44 million student loan borrowers in this country
- 65% of college seniors who graduated from nonprofit colleges in 2017 had student loan debt.
- Overall Student loan debt has seen almost 157% growth since the Great Recession and is the fastest-growing portion of the total household debt in the U.S.
As of 2018, roughly 1 out of 10 people with student loans were late with (or completely missed) their payments. That’s the highest 90+-day delinquency rate of all household debt—outranking auto loans, credit card debt and mortgages. So how can you pay off your student loan? This article will cover some helpful tips.
Takeaways: How To Pay Off Students Loans
To pay off your student loan, you have a couple of options. You can earn more money, save more money, leverage your environment, leverage your negotiations skills or credit card short term strategy.
A. Earn more money
Typically you can’t pay off your loan because you don’t earn enough money to keep you running. Every hundred dollars taken away from your paycheck puts you under hard stress to meet up with your bills. So a great solution will be to earn more money. Many options are available but you can either change job, request for a promotion or find a side hustle. Gaining extra income comes with more sacrifices. Either it will take away your free time, or you will need to invest money. Likely it is going to be a combination of both. However if well manage it could be very profitable, you could make a couple of thousands of dollars per month.
B. Save more money
Another very interesting approach of getting the financial space you desperately need to pay your students loan is to reduce your living expenses and to live within your means. Cut off all unnecessary expenses, trim your bills to save money. Another simple way is to adopt a minimalist lifestyle. You will have to let go of some of the threads and perhaps your gadgets. It is not easy but you have to keep in mind the main objective of paying off your students. It will certainly push you towards some hard time, maybe your loved ones will hate you, and probably you will be anti-social. Eventually, you will no more be as cool as you are now. But who cares the most important is your financial health. So stay focus and resist all the discounts, sales, promotions and the sweet talks encouraging you to be trending.
C. Leverage your community
The community approach in paying off your student loan is a collective approach that relies on tools such as saving circles, or lending circles (you can get a loan for zero interest rate). The community implication is also extremely critical as your relationships, connections, friendships can really support you towards achieving your goals. You could even team up with another person for motivation. Get a roommate or live with your parent so you can share bills and put it towards paying off your student loan. Of course, you will sacrifice your freedom and independence but you will gain in the long run. Nothing worth than having some extra dollars in your account.
Check out for job opportunities that include or negotiate a sign-in-bonus, performance bonus and eventually a commission if you are in an industry that promotes that. You can take full advantage of money-making opportunities available at your company such as hiring referrals, or mission nobody wants to do. Plus you can also sell your side hustle to people around you in your company. Finally do not hesitate to change job, field or career if you realize the company or the industry will not take you where you want to go.
C. Credit card strategy short term
This is a very risky strategy but if well managed can be worth the shot. You can max out your credit card to pay part of your loan, then pay your credit card monthly payment. Because of its minimal, you won’t have that much pressure financially. That will give you space to breathe and strategize for the long term. It is a short term strategy that works pretty well if you put in the discipline required.
D. Credit Card Rewards
Every time you use it you are accumulating points. You can turn out and maximize those options by asking your roommate/family every month to do purchases and accumulate rewards with a single card. The credit reward is then redeemed and utilize the money to pay off student loan monthly payment. You organize it as a circle with each member of the community waiting for their turn every month.
Nonetheless, you need to read the fine print to understand the terms and conditions of your cash rewards program.
Here are some simple tips that you can apply to pay off your student loan.
- Drive a cheap car if you absolutely need a car. If you don’t stick to public transportation and ride-sharing when it is necessary.
- Buy use phone or cheap phone for less than $450
- Avoid friends who are always thinking about spending money or refusing to grow up
- Get a partner or get married to a person that is willing to support you through the process.
- Cut off all unnecessary subscription plans
- Stop taking vacations or travelings
In addition to the above, there another legal way you can take advantage of to avoid paying your student loan.
Extra: 4 Legal ways to stop paying your student loan
1. Income-driven repayment
Typically you will start paying your student loan only when you reach a pre-defined income threshold.
2. Join public serve
After a certain number of years of working in the public service, you can be eligible for a federal forgiveness program.
3. Serve your country and take advantage of forgiveness program for people who have served the military.
Joining the military has numerous advantages. One of those advantages is free tuition and the opportunity to get part of your complete loan taking care off.
4. File for bankruptcy
This is the ultimate decision, depending on how you will take things forward. If it comes to the point where you can’t afford to pay your student loan anymore then you can file for bankruptcy.
How long does it take to pay off your student loan?
There isn’t any miracle solution. Maybe if you win the lottery, receive an inheritance, donation, or apply for debt forgiveness. Perhaps you can find legal ways to stop paying your student loans. But, in essence, the time will depend on your ability to be focused and committed to getting out of debt. Some people get out debt two years after graduation, others 10 years. Some never. It all depends on you.
Conclusion: How To Pay Off Student Loan
Student loans are a pain in our finances. The negative impact on us goes beyond our imaginations. It affects our ability to buy a house, get married, or to leave in a certain comfort with our family. That is why the more you get out quit the better you will be. More importantly, money management skills are critical don’t hesitate to learn and ask questions on how to get out of debt.