Anyone with student debt will tell you how tiresome, stressful and stressful it can be. It’s easy to panic or avoid them altogether. But in reality, the best (and only) way to treat them is like tearing off a bandage: you just need to get a firm hold and face them head-on.
Statistics on student loans are sobering: the average student loan debt of graduates of the class of 2017 was € 39,400, not to mention that we owe more than € 1.48 trillion of student loan debt out of about 44 million of borrowers *. These numbers are at best dizzying.
We do not even talk about other debts, such as credit card debt, medical bills or mortgages. Talk about having a difficult start from the door!
In addition to having a budget, it is important to have a plan of attack to get rid of student loan debt. Use these tips to find the best way to combat these student loans once and for all.
How to get out of student debt quickly
There are a few ways to get rid of student debt. You must either earn more money or spend less on what you already earn.
Then you must do everything against your student loans and strive to get them back as soon as possible. There are tips and tricks to help you reduce the amount you pay in interest, but it will take some elbow grease to get rid of your student debt.
These steps will show you how to get a free student loan debt by organizing your information, determining what you need and creating an attack plan:
1. Know what you owe on your student loan debt.
You can not create a plan of attack without knowing what you need. Create a spreadsheet that lists:
- The number of loans
- Which supplier are you with?
- Interest rates on each
- Minimum monthly payments
- Loan type
- Contact details of each supplier
- Connection information
Once everything is in place, it is easier to call the student loan provider to discuss payment schedules or how to apply additional payments.
2. Give priority to your student loans and focus on repaying the smallest amount.
By first giving priority to the smallest loan, you use Dave Ramsey’s snowball methodology. Psychologically, you want to create easy winnings to stay motivated. By focusing first on repaying this loan, you will be able to create motivation and focus during your repayment process.
3. Automate your minimum payments (or more).
When I subscribed to automatic payments, my student loan company offered me a discount of 0.25% as long as automatic payment was maintained. Ask your lending company if it will offer you a similar offer. If nothing else, you know that by signing up, you do not have to worry about missing payments.
4. Pay beyond monthly minimums.
The fastest way to get rid of student debt is to pay more than the monthly minimum. The average monthly payment of a student loan is € 351 *. We all know that the only way to get those student loans back at any time in this century is to pay more than what is owed each month. The important thing is to make sure that it is applied correctly.
It should be repeated:
The best way to get rid of student debt is to make sure your extra payments are applied correctly.
What does that mean? That you want the additional payments to be applied in principle, not interest. Interest on student loans accumulates daily, so that they are always paid first. However, when you make an additional payment, you can choose to apply it to the principle OR you can choose to “pay in advance” the future interest (not the daily interest already accumulated).
Of course, you want to pay the principle first. When you do this, you have less package, which means that the interest you pay will go down.
Some student loan providers are sneaky and ridiculous with that. When you make a payment, if you can not choose how to apply it, you will need to call and keep in touch with them to make sure they apply it correctly.
5. Make payments every two weeks.
It’s a well-known trick to pay off mortgages faster. Instead of making a single monthly payment, make half of the payment due every two weeks. As there are 52 weeks in a year, you end up with an additional payment, as well as less interest accrued.
Even if I did not personally do that, you would prepay half of the March payment on February 15th and the rest on March 1st. In this way, you are not late with the payments, but you pay less interest overall.
6. Consider consolidating or refinancing your student debt.
Only consider consolidation or refinancing if it makes sense. Examine all the options and compare them before making the jump. I was able to find the right moment to consolidate my student loans at a rate of 1.75%, which is unprecedented today. Make sure to do your research and find out what you are signing up before you commit. Some interesting articles can help you make a decision, such as Student Loan Hero calculators.
7. Examine the student loan forgiveness.
The handover of a student loan usually depends on your profession. You need to make sure that you work for the right type of business and the type of job and that you apply as soon as possible. It takes 10 years to get a loan cancellation, so you want time to press as quickly as possible. Also, remember that you will have to pay taxes on the amount of your pardon, so be prepared too. For more information on canceling student loans, visit the website of the Canada Student Loans Program.
Be sure to also be wary of companies that say they will help you cancel your loans. These are often scams. While canceling the student loan is very attractive, be sure to be on the lookout for companies and offers too good to be true.
8. Ask your employer for help.
Check and see if your company offers Loan Repayment Assistance Programs (LRAP). This is a new benefit offered by some companies to help recruit and retain employees. If your current company does not offer an evaluation system, it may be time to look for companies that do it and consider a career change.
In addition, some employers offer assistance with financial services. Take the opportunity to talk to a financial advisor and determine what your options are for these loans to be repaid quickly.
9. Set smaller steps and goals.
By creating smaller milestones, you can use them to stay motivated and stay on course. Cut out your goals in percentages or individual loans. Whenever you reach a milestone, be sure to celebrate in one way or another. It’s a great way to help you keep going and recognize your progress!
10. Have a visual reminder.
Use a debt repayment tracking print to help you keep a visual reminder. Place it in a place where you will see it often and that will remind you of your goals. This is a great way to keep your motivation and see your debt go down. Y
11. Fight your way to student loan freedom.
Find a camp that fits your schedule and use it to earn extra money. You can do anything from online surveys to DoorDash, to overtime at your current job. For more ideas on side hordes, see:
12. Examine how you budget and use your money.
There are chances that parts of your budget will require a reduction, and the extra surplus will be paid on these student loans. The easiest way to find extra money is to delve into what you already have and reuse it. Here are some easy winnings to get you started:
Use your credit card (responsibly).
Believe it or not, some credit cards allow you to use your reward points to pay off the principle of your student loan. It sounds incredible, right? As long as you pay your card in full every month, so that you do not pay interest, it could be advantageous for both parties. For more information, see the bankrate.com article here.
Update your thinking about how you spend.
Use the money you earn wisely. The more you save, the more you can apply to this student loan debt. Consider the following to help you reduce your savings:
- Consider buying used or new
- Use Trim to cut your phone, your cable and other bills. Or, drop the cable completely!
- Switch to direct conversation mode to save even more on your phone bill
- Go to a cheaper grocery store
- Start the coupon
- Carpool, bike or use public transit to work
- Review and adjust insurance coverage
- Reconsider what is a need in relation to a desire
- Find other ways to reduce your expenses
Meal plan to reduce your grocery budget.
For us, the most important part of our budget that was the easiest to reduce was our food budget. Spending € 400 more per month on student loan debt was invaluable, and we did it using the grocery budget transformation. Erin Chase is the creator of 5 € Dinners, MySoalez and Grocery Budget Makeover. She knows what she’s talking about!
With Grover Budget Makeover, you’ll learn many key ideas about organization, budgeting and purchasing:
- Include your family in the process
- Set up your shopping list,
- how to store,
- How to make the best use of the coupons (only if you wish!)
- save time in the kitchen.
Think about taking a retirement / savings break.
Suspension of your retirement or savings is a very personal choice and will vary depending on your specific situation. If you have an employer who pays 401k dues, I will not stop this contribution because it is free money.
On the other hand, if you have a high-interest loan, such as a credit card or student loan, it makes sense to suspend pension contributions or low-interest savings until you these loans are repaid. Make sure you do your research and determine your long-term savings to determine what’s best for you.
Put extra money for your student loans.
Think of all the extra money you receive each year: salary increases, bonuses, gifts, tax refunds, overtime… the list goes on. You want to use 100% of this extra income in your student loans to make those balances go down a lot faster. You’ll be happy to have used it on your student loan instead of a classy dinner or extra things that you do not even need to hang out at home.
You do not need a student debt-free company to crush your student loans. Use these steps to help you understand how to quickly get rid of your student debt and you’ll be free in no time!