The Best Practices for Paying off Your Student Loans
Whether you are just beginning college or you have been putting off those payments for years, paying off student loans can be troublesome for many. Not only can it be very expensive to overcome, but it can also take many years to get the burden off your back. Though not everyone uses the same strategies in order to repay their loans, there are some common practices that can be used in order to efficiently pay the loans back. It may take a few years, but getting it off your agenda in your earlier years (if you are financially capable) can alleviate some stress later on in your life. Here are 5 tips to use for paying off your student loans.
1. Get on a budget.
If you're not already on a budget, you are behind. A budget is necessary in many different aspects of life, but especially when it comes to paying off certain loans and fees. It is crucial that you allocate a certain amount of money to your student loans each month. Obviously, if you can't afford to do that just yet, don't do it. You don't have to break the bank for your student loans, but you should begin to put some money towards them each month. This way, it becomes just another monthly payment that you have to deal with. While setting up your budget, you may even find that you have some extra money that you can either save for later or increase the amount that you are allocating towards certain things.
2. Pay more than the minimum.
This is another situation that is dependent on income. If the minimum is all you can meet right now, then don't go crazy and try to pay everything off all at once. However, if you do have the funds to pay the minimum plus more, why not do that? By paying the minimum each month, the entire process will only become much slower and you might not even be making any progress. There are plenty of student loan calculators that you can use on the internet, and if you're struggling with your math and money, these can be very helpful.
A tip - sometimes when you pay more than the minimum, your student loan services can carry over the extra money you payed into the next month, which then pushes the due date of your next payment back, slowing down the process. You can contact your loan servicer and request that they keep the due date the same, that way you can effectively meet the minimum plus the extra amount that you are paying and not have to worry about the changing of the next due date.
3. Make some sacrifices.
This is similar to number 1 in the fact that you must look over your entire budget and find out where your money is going. Look for places where too much money is going, and cut that spending. Whether that be on your housing cost because you live alone or other places, try your best to make the most of your money. Sell the excess items you have in your house or apartment, find a roommate to cut costs, stop going out on the weekends. Some things may be easier than others, but it is crucial that financial sacrifices are made in order for you to get the burden of student loans off your back.
4. If necessary, increase income by working a side job.
Not everyone has the time and ability to get a side hustle for cash, but if you do and you need the extra money, why not try it? There are plenty of options for making quick money, such as signing up to be a delivery driver for a restaurant or for one of the many delivery apps, such as GrubHub, DoorDash, etc The extra job won't be your job forever, but it will give you a little boost in your funds and give you the ability to pay more than the minimum.
5. Stay Motivated
Though this seems self explanatory, some people need reminders. Living debt free is powerful and allows you to make financially independent decisions after you have gone through the hardships of repaying your loans. If you're having trouble staying motivated and focused, there are online courses that will help guide you through the process and teach you strategies for moving forward with your loans, money, and time. Staying motivated will help in the long run, so think of it as doing your future self a favor.
Student loans are effecting almost everyone. Each strategy works different for individual situations and people, so don't feel confined to the 5 ideas above. It is always a good idea to speak to a professional about how to best work to get rid of your student loans.
For Educational Purposes Only – Not to be relied upon as financial, tax, or legal advice. The views expressed are those of the author/presenter and all data is derived from sources believed to be reliable.
HTK does not offer debt or loan repayment advice.