Deceptive student loans. If feels like free money at first.
After all, it hardly takes any effort to secure them, yet they hold us hostage until the day we make our final payment. They’re a hefty burden hanging over our heads as we start a life, family, and career.
Paying off your student loans early can give you both peace of mind and financial flexibility. But how can we pay off student loans faster?
Here are 20 ways that will help you attack your student loans with a vengeance.
While in school.
1. Return that refund.
Loan refunds occur when there’s a credit on your account after federal loans are applied to your tuition, fees, and books. It’s sent to you as a check through the mail and should only be used on school expenses.
Remember, you owe this money just like the rest of your loan plus interest. Don’t use it as an income source. Return refund checks to your loan servicer with instructions on how to apply it to your account or cash the check to make a loan payment.
2. Don’t rely on loans.
Get a job to pay for some of your school expenses. Working part-time while in school wasn’t fun, but it’s something I’m glad I did to avoid taking out more debt and it helped. Ideally you should take jobs that are in your field of interest to boost your resume.
For example, my college job at a hotel front desk opened up scholarship opportunities and jump started my career in hospitality management.
Related Article: How to Escape Student Loan Debt Before Age 30
3. Move off-campus.
Living off campus may reduce your loans for housing, so weigh your options. My resident housing freshmen year cost nearly $800 per month for a shared room.
I moved off campus sophomore year with a roommate for a private room costing just $425 per month. That reduced my semester living expenses by almost 50%.
4. Chip away at interest.
You probably won’t have the money to make a substantial dent in your loans while in college and that’s understandable. But you can try to make payments on your interest. Don’t worry, it won’t cost you much.
Depending on your interest rate your payment could be less than $50 per month and it can save you thousands in the long run.
5. Don’t procrastinate.
Calculating your total student loan debt for the first time after you graduate is a mistake. You’ll be in for a surprise; loans are always more than you expect.
Keep informed on how much your loan is throughout your college career. Then calculate your monthly loan payment before your grace period ends to prepare your budget for the expense.
6. Put your big girl/boy pants on.
Don’t drag your feet with debt repayment. You can hope it will disappear if you ignore it and make minimum payments each month. But it won’t – it’ll always be a stress looming over you.
If you want to pay off your student loans quicker get determined. You’ll need to think aggressively about squashing it. Motivate yourself by imagining how liberated you’ll feel once the debt is repaid.
7. Find an accountability buddy.
Paying back student loan debt can feel lonely, especially since we tend to keep personal finance matters private. If you’re setting high repayment goals for yourself, find an accountability partner to keep you on track.
You can check in with each other to share tips, successes, and frustrations. When you have a buddy it won’t feel like you’re going through the arduous journey alone.
8. Track your spending.
The key to paying back your student loans faster is spending less and making more. To spend less you should track where your money is going and for that you’ll need to come up with a monthly budget. If you want professional one-on-one budgeting advice, advising through LearnVest.com is an affordable option to consider.
9. Find an employer who’ll help.
Some employers and volunteer agencies will offer student loan repayment assistance. Consult with your employer to see if they offer it. If not, you may be able to find a new employer that will help. Teachers, government employees, health care professionals, and people in public service can find loan assistance opportunities with the following programs/organizations:
- Public Service Loan Forgiveness
- Nurse Corps Loan Repayment Program
- National Health Services Corps
- Equal Justice Works
- American Federal of Teachers
- Volunteers in Service to America
10. Start a crowd fund.
Instead of taking gifts for your birthday or holidays ask for cash. You can also organize a public fund with sites like GoFundMe or Indigogo, but keep in mind some processing fees and restrictions may apply.
If you have a particularly compelling debt repayment story share it on social media, you may be one of the lucky few who’s fund goes viral.
11. Deduct student loan interest.
Tax season is upon us! Take advantage of tax deductions for your student loan payments. If you make less than $60,000 per year you can deduct student loan interest payments of up to $2,500.
Your lender will send you Form 1098-E which reports your interest paid. Then take advantage of this deduction in the “adjustments to income section” of Form 1040 or 1040A.
12. Use your tax refund.
When you receive a nice chunk of change from the government put it towards debt repayment. I know it’s depressing to see that money disappear. Just remember that once your debt is paid off you’ll have many more tax years to spend the money as you please.
13. Refinance your debt.
If you have good credit and a monthly gross income over $2,000 you may find lenders who’ll refinance your loan. If you qualify, refinancing can lower your interest rate and significantly decrease the amount you pay on the loans overtime. For a round up of The Best Banks to Refinance and Consolidate Student Loans visit Student Loan Hero.
14. Find 1, 2, 3 or more roommates.
If Dallas Mavericks owner Mark Cuban can do it anyone can. At 25, Mark Cuban lived in an apartment with 5 other men and slept on the floor before developing his first company. And now he’s a billionaire.
Living by yourself isn’t always practical. Having roommates or moving back home with parents is nothing to be ashamed of. It can save you significant amounts of money that you can put towards debt repayment.
15. Do It Yourself.
Learn how to do luxuries you enjoy at home to save money. I became my own hairstylist and manicurist for our family in order to make extra loan payments. That savings with other cutbacks contributed to our early loan payoff as we saved almost $200 per month. It may not seem like much at first, but when you factor in the $2,400 savings at the end of the year it’s worth the effort.
16. Live simple.
To aggressively repay your student loan you have to accept that you’ll need to make some sacrifices. You may not have the latest technology or be able to take the coolest vacations for a little while.
Consider canceling cable for a Netflix subscription, reducing your phones data plan, or carpooling to find more money for debt repayment. Think of all areas where you can cutback on expenses.
17. Allocate your raises.
As soon we get a raise, we’re thinking about how we’ll spend the extra money coming in each month. If you can already live comfortably on what you made in the past, why let the added income influence you to spend more? Instead use the income to make additional payments on your student loan.
18. Be thrifty.
The more money you save on purchases, the more debt you can repay. Don’t buy anything without searching for the best deal or looking for coupons.
19. Get a part-time gig.
Your full-time job may not provide you the means to make extra monthly debt payments. Take on a part-time evening or weekend job and you can dump that income directly into your loan. If you want to work from home, the job board FlexJobs posts part-time remote positions for people with a wide range of experience. Other part-time jobs that offer competitive pay include restaurant serving, tutoring, or babysitting.
20. Start a side biz.
If a part-time job isn’t your cup of tea take up a side hustle. Use a skill that you possess and offer independent services. As a freelancer or consultant you can do services like writing, bookkeeping, or advising. This is money you can make on your own terms to add to your monthly debt payments.
There’s no secret loop hole to paying off debt quickly. It takes patience, determination, and sacrifice. But if you have the means to make debt repayment your top priority, you’re capable of paying off student loan debt faster than you can imagine.
What other ways have helped you pay back your student loans?