Carrie Heard Contributor

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active 7 months, 3 weeks ago

5 Tips to Pay off Your Student Loans Faster

If you’re a recent grad, you’re probably more eager to get rid of your student loans than you are to do anything else. Nobody wants that debt hanging over them when they’re trying to establish themselves in a new adult life. You want to buy your own house and a great car, and you need to get your loan debts to a manageable place before you can meet your other goals. With careful planning and a little cash flow, you can make a serious dent in those debts before you know it.

1. Start with a Budget 

In order to be able to keep up with your loans, as well as all of your other expenses, you need to begin with a budget. There are tons of great budgeting apps for students and grads looking to plan for their futures. When you see how much you’re spending and in what areas, you’ll be able to tell where you should cut back. Learning where your money is going may surprise you, but it’s the first step to planning out your financial future.

2. Figure Out How Much More You Need 

Do you actually have enough money to meet all of your obligations, including your student loan debt? If you’re able to comfortably make your minimum payments, that’s a good sign. If you can’t, or if you’re looking to pay more than the minimum in order to get ahead, you need to figure out how much more money you’re going to need. You can’t cut back until you’re eating nothing but instant noodles and borrowing toothpaste from your friends –you’ll need to find a way to supplement your income.

3. Freelance For Spare Cash

Grads have tons of skills that people would be willing to pay money for. Almost any skill you have can be turned out for profit. Writing, editing, coding, web design, and graphic arts are all easy to sell online. As a freelancer, you’ll be making your own hours and choosing who you work with. It’s easy to juggle alongside a day job, and it can be just as profitable. Even if you only spend half of what you make freelancing to pay above the minimum payment on your student loans, you’re still coming out ahead.

4. Buy and Sell Online 

If you aren’t into freelancing, you can always use the internet to buy and sell. Some people purchase things secondhand or on consignment and use the internet to sell them for more – it’s possible to find hidden gems in unlikely places and make an impressive payday. If you’d rather not leave your chair, you can always buy and sell websites online. You can either create your own profitable website or get a great deal on someone else’s, and then find a safe and reliable buyer to take it off your hands. It’s one of the best ways to make money in your pajamas.

5. Strategize Appropriately

Some people find it easier to make their payments at the halfway point. Put in a little bit every two weeks just to keep you on track. If an emergency happens before the month is over, you won’t be nearly as far behind. If you have multiple loans, prioritize those with the highest interest levels first. The quicker those are gone, the less you’ll need to pay. It also helps to refinance once you’ve made a huge dent – your interest rates may go down, and your monthly payments will become easier to budget.

Believe it or not, those student loans will be gone eventually. It’s never fun to pay them off, but life feels incredible once they’re gone. If you ever feel bogged down, just imagine what it will be like to have all of that spare money every month. The possibilities will keep you going.