How To Payoff Your Student Loan Debt FAST! (5 Great Strategies)
Student loan debt is probably one of the most stressful things for most people – especially in first world nations.
Due to high cost of tertiary education, most people are forced to apply for student loans – so as to fund for their ‘higher education’.
This sounds cool for most young adults who're so eager to go to college – except for one thing i.e. when you graduate, you'll be downing in massive debt – and you'll be required to pay it back.
That's what stresses most people – since you'll spend more years trying to repay the debt.
But in this post, l will share with you some of the strategies that you can use to payoff your student debt much faster – so that you can get rid of this burden ASAP.
These strategies includes:
Without wasting much time, let me jump straight into more detail.
1. Setup Auto Debit
First and foremost, it's important to setup auto debit.
The reason being that, if you setup this strategy, money will be automatically deducted from your bank account i.e. every month end, or maybe every time you receive your pay-check.
This is so helpful because, if you allow money to get into your bank account, you might end up misusing it – hence ignoring your loan payments.
However, if you automate the process, money will be automatically paid – thus, avoiding such scenarios.
2. Choose A Debt Payoff Strategy
As we all know, we have the debt snow ball strategy & the debt avalanche strategy.
The snow ball strategy allows you to pay your debts based on their value i.e. from the lowest to the highest (regardless of interest rates).
For example, if you have a $2k debt & a $10k debt, you'll payoff the $2k debt first – then the $10k debt later.
With this strategy, you'll feel like you're shaving-off your debt – because you'll be checking-off some smaller debts much quicker.
On the flip side, the avalanche strategy allows you to pay your debts based on their interest rates i.e. from the highest to the lowest.
For example, if you have 3 debts i.e.
$2k @ 4%,
$5k @ 7.5%,
$10k @ 6%;
You'll need to pay-off the debt with the highest rate of interest first i.e. the $5k one, followed by the $10k one, then last, the $2k one.
The reason being that, debts with high interest rates acroases much faster – thus, you need to get rid of them ASAP – before they affect your financial position.
Personally, l prefer the avalanche method – because it's more economic (mathematically) compared to the snow bow strategy.
But you can do your own research to see which method works best for you.
3. Set Payment Goals
Another strategy that works well is to set some payment goals for your debts.
This allows you to stay on track with your debt payments – hence, you'll be so focused to cover-up your debts within your target time frames.
For example, if you set a goal of pay-off your debt within 6 years, you'll be motivated to do whatever it takes to attain that goal.
And along the journey, you can also track your progress – so as to see how far you've covered – as well as how you can improve your payment strategies in order to pay your debt even much faster.
Thus, it's important to draft a plan on how you're going to pay-off your debt – then you stick to that plan.
4. Cut-off Unnecessary Expenses
Another helpful strategy is to cut-off some unnecessary expenses.
You might have some unnecessary things on your budget which are consuming some unnecessary income from your account.
If you avoid those things, you can spare some extra bucks – which you can direct towards the payment of your student debt.
Instead of going out every weekend, eating at exotic places, drinking expensive campaigns, etc. – you can reduce your spending habits – so as to save some few bucks which might be used to pay for your debt.
Or instead of using your car everyday, you can use public transport – thus, allowing you to save some gas money – which might also be used to pay your loan.
Thus, you should evaluate your monthly expenses in order to see which areas are consuming unnecessary income from you.
Once you identify them, you must work on reducing them – or even cutting them off – so that you can have more money to direct towards your loan payment.
5. Increase Your Earnings Potential
Last but not least, you must find some ways to increase your earnings potential.
This allows you to come-up with additional income to direct towards your loan payment – rather than just relying on your primary income source.
You can look for a part time job which you can do on weekends/off days – or even after your normal working hours.
For example, if you have a 9 to 5 job, you can look for a part time job that allows you to work from maybe 6 to 10 – thus, allowing you to raise additional funds to fund your debt.
This does not necessarily need to be related to your profession – but rather, something which just helps with additional funds.
Alternatively, you can start a side hustle – which also helps to generate some extra funds for you.
For example, you can do garage sale flipping – whereby you buy second hand items for a lower price – then you resale them on eBay or Facebook marketplace.
Or maybe you can do freelancing – whereby you sell your skills to other people – in exchange of money e.g. graphic design, web development, video editing, writing, etc.
That way, you can be able to generate some extra funds – which can be used to pay your student debt.
Wrapping Up
I hope that you've gained some value from this post – since l tried by all means to share my best knowledge.
Using these strategies, you can repay your student loan debt much faster – thus, allowing you to get this burden off your shoulders.
Disclaimer: I’m not a financial adviser – meaning, all points shared in this post should not be taken as professional advice. You might need to consult an expert if you need professional advice.
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