Want to learn how to pay off student loans? With my student loan repayment plan, I was able to pay off $40,000 in student loan debt in 7 months! One of the best ways to save money is to finally get rid of those pesky loans that are hurting your financial situation.
Learning how to pay off student loans can lead to many positives, such as:
- You may finally feel less financial stress.
- You may be able to use that money towards something more important, such as saving for retirement.
- Getting rid of your student loans may allow you to pursue other goals in life, such as traveling more or looking for a better job.
I know these things are true because learning how to pay off my student loans is one of the best decisions that I've ever made.
No, it wasn't easy to pay off my student loans that quickly, but it was definitely worth it. No longer having those monthly payments hanging over my head is a HUGE relief, and it allowed me to eventually leave my day job and travel full-time.
Related posts on how to pay off student loans:
- 6 Ways I Saved Money On College Costs
- How Blogging Paid Off My Student Loans
- The Benefits Of Paying Off Student Loan Debt Early
- 30+ Ways To Save Money Each Month
- 12 Work From Home Jobs That Can Earn You $1,000+ Each Month
- How Do Student Loans Work?
How to pay off student loans and create a great student loan repayment plan:
Total how much student loan debt you have.
The very first thing that I recommend you do if you want to learn how to pay off student loans is to add up the total amount of student loans that you have.
When you total your student loans, do not just estimate how much student loan debt you have.
You should actually pull up each student loan and tally everything, down to the penny. By doing so, you will have a much more realistic view of exactly how much you're dealing with.
Plus, the average person has no idea how much student loan debt they have! Usually, they have far more than they originally thought.
Understand your student loans better.
There are many people who simply do not understand their student loans. There are many things to research so that you can create the best student loan repayment plan, and this will also help you understand your loans and interest rates.
You should understand:
- Your interest rate. Some student loans have fixed interest rates, whereas others might have variable rates. You'll want to figure out what the interest rate on your loans are because that may impact the student loan repayment plan you decide on. For example, you might choose to pay off your student loans that have the highest interest rates first so that you can pay less money over time.
- What a monthly payment means. Many people believe that a monthly payment is all that you have to pay, are allowed to pay, or that by paying just the minimum monthly payment you won't owe any interest. These three things are so incorrect! Even if you pay the minimum monthly payment, you will most likely still owe interest charges (unless your interest rate is 0% – but that is very unlikely with student loans).
- Student loan reimbursements. Some employers will give you money to put towards your student loans, but you should always do your research when it comes to this area. Some employers require that you work for them for a certain amount of time, you have great grades, good attendance, and they might have other requirements as well. There are many employers out there who will pay your student loans back (fully or partially), so definitely look into this option.
- Auto-payment plans. For most student loans, you can probably auto-pay them and receive a discount. Always look into this as you may be able to lower your interest rate by 0.25% on each of your student loans.
I recommend that you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more. You can also connect accounts, such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more. Plus, it's FREE.
Determine if refinancing your student loans is right for you.
Student loan refinancing is when you apply for a new loan that is then used to pay off your other student loans. This may be a good option if your credit history or credit score is better than when you originally took out your student loans.
By refinancing your student loans, you may qualify for better repayment terms, a lower interest rate, and more. This is great because it may help you pay off your student loans quicker.
The positives of refinancing student loans include:
- One monthly payment to simplify your finances.
- Lower monthly payments.
- Lower interest rates, and more.
Some companies, like Credible, allow you to refinance your federal student loans as well as your private student loans into one. On average, refinancing can save you thousands of dollars on your loan, which is amazing!
However, before refinancing a federal student loan, you will want to think about different federal benefits that you may be giving up. You may give up income-based repayment plans and loan forgiveness for those who have certain public service jobs (such as jobs at public schools, the military, Peace Corps, and more). By refinancing federal student loans, you are giving up any future option to these.
Read further at: Consolidating And Refinancing Student Loans – What You Should Know.
Related tip on how to pay off student loans: I highly recommend Credible for student loan refinancing. They are the top student loan refinancing company and have great customer service! You can significantly lower the interest rate on your student loans which may help you shave thousands off your student loan bill over time. Through Credible, you may be able to refinance your student loans at a rate as low as 2.14%! Plus, it's free to apply and Credible is giving Making Sense of Cents readers a $100 bonus when they refinance.
Reduce your interest rate for your student loan repayment plan.
As I stated earlier, if you automatically pay your student loans each month or consolidate them, then sometimes you can get an interest rate reduction.
With Sallie Mae, I believe the reduction is 0.25%.
That may not seem significant, but it is something! Remember, every little bit counts when it comes to having a good student loan repayment plan.
Create the best budget.
If you don't have one already, then you should create a budget immediately. This will help you learn how to pay off student loans as you'll learn how to manage your money better.
Budgets are great, because they keep you mindful of your income and expenses. With a budget, you will know exactly how much you can spend in a category each month, how much you have to work with, what spending areas need to be evaluated, among other things.
Learn more at How To Create a Budget That Works.
Look for more ways to earn money.
Making extra money can allow you to pay off your students loans quickly because there is no limit to how much money you can make.
Finding ways to make extra money is how I was able to pay off my student loans so quickly!
And trust me, you probably do have time in your day to make extra money.
Just think about it: The average person watches 35 hours of TV a week and spends around 15 hours a week on social media. If you could use that time better and make more money with those extra hours, you'll be able to pay off your student loans in no time!
Here are some ways to make more money so that you can learn how to pay off student loans:
- Start a blog. Blogging is how I make a living and just a few years ago I never thought it would be possible. I earn around $100,000 a month through blogging. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $2.95 per month, plus you get a free domain if you sign-up through my tutorial.
- Start a business. There are many business ideas that you could start in order to make extra money.
- Sell your stuff. There are many things you can do to make money by selling items. We all have extra things laying around that can be sold, or you can even search for items that can be bought and resold for a profit.
- Rent an extra room in your home. If you have extra space in your house, then you may want to rent it out. Read A Complete Guide To Renting A Room For Extra Money.
- Answer surveys. Survey companies I recommend include Swagbucks, Survey Junkie, Pinecone Research, Opinion Outpost, Prize Rebel, and Harris Poll Online. They're free to join and free to use! You get paid to answer surveys and to test products. It's best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
- Become an Uber or Lyft driver. Driving others around in your spare time can be a great money maker. Read more about this in my post – How To Become An Uber Or Lyft Driver. Click here to join Uber and start making money ASAP.
- Find a part-time job. There are many part-time jobs that you may be able to find. You can find a job on sites such as Snagajob, Craigslist (yes, I've found a legitimate job through there before), Monster, and so on.
Related articles that will help you learn how to pay off student loans:
- 75+ Ways To Make Extra Money
- 8 Things To Sell To Make Money
- 10 Ways To Make Money Online From The Comfort of Your Home
- 10 Things I've Done To Make Extra Money
- Ways To Make An Extra $1,000 A Month
How to pay off your student loans – Find ways to reduce your expenses.
The next step is to cut your budget so that you can have a faster student loan repayment plan. Even though you may have a budget, you should go through it line by line and see what you really do not need to be spending money on.
There's probably something that you're wasting your money on.
Until you write it down in your budget, you may not realize how much money you are wasting on things you don't need. And, remember, it's never too late to start trimming your budget and to put your money towards important things like paying off student loans!
Even if all you can cut is $100 each month, that is better than nothing. That's $1,200 a year right there!
Some expenses you may be able to cut include:
- Lower your cell phone bill. Instead of paying the $150 or more that you currently spend on your cell phone bill, there are companies out there like Republic Wireless that offer cell phone service starting at $15. YES, I SAID $15! If you use my Republic Wireless affiliate link, you can change your life and start saving thousands of dollars a year on your cell phone service. If you are interested in hearing more, I created a full review on Republic Wireless. I've been using them for over a year and they are great.
- ATM fees. You don't need to pay ATM fees, but for some reason so many people do!
- Sign up for a website like Ebates where you can earn CASH BACK for spending how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free $10 cash back!
- Pay bills on time. This way you can avoid late fees.
- Shop around for insurance. This includes health insurance, car insurance, life insurance, home insurance, and so on. Insurance pricing can vary significantly from one company to the next. The last time we were shopping for car insurance, we found that our old company wanted something like $205 to insure one car for one month, whereas the company we have now charges $50 a month for the same exact coverage. INSANE!
- Save money on food. I recently joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It's only $5 a month (the first four weeks are free) and they send meal plans straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 or less per person. This allows you to save time because you won't have to meal plan anymore, and it will save you money as well!
- Fuel savings. Combine your car trips, drive more efficiently, get a fuel efficient car, etc.
- Trade in your car for a cheaper one. For us, we are car people. Cars are one of our splurges. However, if you only have a nice car to keep up with the Joneses, then you might want to get rid of it and get something that makes more sense.
- Live in a cheaper home. I'm not saying that you need to live in a box, but if you live in a McMansion, then you may want to think about a smaller home. This way you can save money on utility bills and your mortgage payment.
- Learn to have more frugal fun. We don't spend anywhere near the same amount of money on entertainment as we used to. There are plenty of ways to have frugal fun.
- Look for coupon codes. I search for coupon codes for everything. Today, I have two for you. I have a $20 Airbnb coupon code and a free taxi ride with Uber. Both are great services that I have personally used.
See if your employer will reimburse your student loan debt.
Some companies will pay your student loans quickly if you work for them. I even know of someone who receives a $2 bonus for each hour that she works to put towards her student loans.
$2 may not seem like a lot, but if you work full-time, then that's over $300 a month. $300 a month for student loans is a good amount! And, because it's free money, it can all be put towards paying off your student loans quickly.
Create a plan to pay off your student loans.
After you have completed the steps above, you'll want to put it all together and create a plan.
Without a plan, you would just be all over the place, making it difficult to reach your goal of learning how to pay off student loans.
You should create a plan that details the steps you need in order to pay off your student loans, what will happen as you reach each step, when and how you will track your progress, and more.
Being detailed with your plan will help you reach your goal and become successful.
Stay motivated with your student loan repayment plan.
Finding motivation can be a hard task for anyone. Motivation is important because it can help you keep your eye on the goal even when you want to quit. Motivation will help you continue to work hard towards your goal, even when it seems impossible. Motivation is what keeps you going so that you do not quit.
Yes, student loan repayment can seem very stressful when you think about it. Many people owe thousands and thousands in student loans.
And, no matter how young or old you are, learning how to pay off student loans can seem difficult or even near impossible. However, think about your goal and how good life will be once all of your student loan debt is gone.
Please try to not let your student loans get you down. Think positively and attack that debt so that you can pay off your student loans fast!
Trust me, once you finally pay off those pesky student loans, you'll be happier than ever!
Related post on how to pay off student loans: 8 Ways To Get Motivated And Reach Your Goals
Pay more than the minimum if you want to learn how to pay off student loans!
The point of what I've written above is to help you pay off your student loans. However, you can always go a little bit further and pay off your student loans more quickly.
The key to speeding up your student loan repayment process is that you will need to pay more than the minimum each month.
It may sound hard, but it really doesn't have to be. Whatever extra you can afford, you should think about putting it towards your student loans. You may be able to shave years off your student loans!
What other ways can a person learn how to pay off student loans? What's your student loan repayment plan?
The post How I Paid Off $40,000 In Student Loans in 7 Months appeared first on Making Sense Of Cents.