How to Pay Off Your Student Loan Debt Faster
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Student loan debt is one of the key factors keeping people from building wealth. It’s not that they can’t come up with the money to pay off their student loan debt, it’s that they have not created a plan that will help them to pay off their student loans faster.
Paying off student loan debt faster than the allotted 10, 20 or even 30-year timeframe requires discipline and if you don’t have that, then it will be very difficult to pay off your student loans.
However; by adjusting your mindset, evaluating your numbers, earning more income, and paying more than the minimum payments, you will be well on your way to paying off your student loans quickly.
Let’s go ahead and jump into 10 effective strategies to help you pay off your student loan debt faster!
1. Release the limiting beliefs
Before paying off any type of debt, it is important to always start with a mindset shift. There is no sense in jumping directly into the numbers if you haven’t released certain limiting beliefs from your mind. In order for you to achieve success at tackling your student loan debt, you must change from an “I can’t” mentality to an “I CAN” mentality. You have to believe that your goal is achievable. Then, you have to be confident in your ability to stick to the plan and actually pay off your student loan debt.
2. Indulge in motivational content
Paying off student loan debt is weird in today’s society and many people won’t be able to understand why you are doing it in the first place. For any journey that requires sacrifice, surrounding yourself with like-minded people and motivational resources is going to be key. To minimize some of the extra drama and discouragement you might face while committing to your student loan debt payoff goals, you have to find a few ways to keep yourself motivated.
Examples might include listening to personal finance podcasts, reading/listening to books, and uniting with a tribe of people who are working towards similar goals. This journey is not going to be easy, so do whatever you can to stay motivated so that you can reach your goal of paying off your student loans.
3. Realize that there is no easy way out
Many people are just sitting back wishing that their student loans would disappear. The reality is that more than likely, it probably won’t happen! No matter how many presidential candidates propose the idea of forgiving trillions of dollars of student loans, we have to remember that Sallie Mae (Navient), Nelnet, American Education Services, and other student loan service providers are all businesses who are in business to make money. So, the likelihood of these businesses walking away from billions of dollars just doesn’t seem like something that will occur in the foreseeable future.
Another issue is that people are sold on the idea that student loan forgiveness via work in the public sector will eliminate all of their student loan debt. However; in many cases, this is just not true. These service providers require that you meet multiple requirements before you ever get a chance to see any type of forgiveness. Then on top of that, it’s not even guaranteed if you do meet the requirements. So rather than hope that your student loans will be paid off by some other entity, you may as well create a student loan payoff plan to take care of the debt yourself.
4. Create a realistic budget (spending plan)
Now here is the part in which we finally start digging into the numbers. This is the stage in which you need to create a really good budget (spending plan). However; only you and/or your spouse can determine what a realistic budget looks like for your household. In order to do this, you must accurately account for all income and expenses coming in and going out of the household. No student loan debt payoff plan will work if your budget isn’t set up properly.
5. Trim your expenses
After creating a realistic budget, you then need to evaluate your spending habits. Review your budget and determine all the things that are essential to your well-being. Then remove all of the other expenses. If you are serious about paying off your student loan debt faster, you should be living on a bare-bones budget which might consist of giving (tithe/offering), housing, utilities, groceries, transportation, health, and insurance. Anything that does not fall into one of these categories should probably be eliminated. Remember that you can always add the non-essential items back into your budget at a later time once your student loan debts are paid off.
6. Increase your income
Once you have cut out all of the fat in your budget, finding ways to earn extra income is going to be critical in helping you to pay off your student loans faster. Before just jumping out there, take a day or two to just brainstorm some ideas. Get creative during this process. Some of these ideas might include selling stuff that is just lying around your home, picking up a side-hustle, or simply charging for the things you are already doing for free. Don’t forget to include any potential increases in salary and bonuses. Every extra dollar you earn can then be applied to your student loan debt to help you pay it down quicker.
7. Use the debt snowball method to pay off student loans
I’m sure you may have heard of other methods being used to pay off debt such as the avalanche method etc. However; if you are serious about paying off your student loan debt, then use the debt snowball method.
The debt snowball method is designed to help you generate quicker results when paying off debt. While this method may not make sense mathematically, it makes tons of sense in regards to building momentum and motivating you to pay off more debt at a quicker speed. By using this method to pay off your student loans, it will allow you to see progress as you pay off smaller student loans first, regardless of interest rates.
8. Set up auto pay for minimum payments
So, you might be asking how enrolling your student loan payments into an auto-pay program will help you pay off your student loans faster. Here’s how…when you enroll in automatic payments, many student loan service providers typically offer a rate discount equal to 0.25%. If it takes you more than a few months to pay off your student loans, then this discount certainly does add up. This is why it’s important to create a realistic budget because it will ensure that you at least have the minimum student loan payment set aside each month to send to your loan service provider. If you are not already enrolled in auto-pay, then either call or log in to your online account to see if you can set it up yourself.
9. Make extra payments several times each month
In order to pay off your student loans fasters, making extra payments over the minimum amount due will accelerate the payoff process. By now, you will have already brainstormed ways to increase your income. So, any extra money you earn from bonuses/raises, selling stuff that’s just laying around your home, picking up a side-hustle, or simply charging for the things you are already doing for free should be applied towards your student loan debt and submitted upon receipt. There is no sense in trying to wait to send in one big lump sum payment because you don’t want the money to be used for something else. Send the extra payments in as soon as it touches your hands or account!
10. Reward yourself for small victories
For every little loan that you pay off, reward yourself. It is important to celebrate small victories in order to keep you motivated. However; these rewards should not be anything extravagant. Save the big celebration for when the student loan debt is equal to zero!
Final thoughts
So, you’ve just been given ten different strategies to help you pay off your student loans faster. However; talking about strategies and actually doing the strategies are totally different. If you want to see your student loan debt decrease, then you have to adjust your mindset, then get to work.
Paying off your student loan debt is going to require lots of sacrifices, but only for one season of your life. Once your debt goes down to zero, you will be free to build wealth, save, invest, travel, or pay off any other debts you might have! The possibilities are endless!
If you get serious and utilize all of these strategies, then you will be well on your way to paying off your student loan debt faster.
