Are you struggling to pay off your student loan? Do you find yourself burdened with this cancerous debt? Well, today I am going to discuss six ways you can get traction quickly and pay off your student loan.
Recently, a Reddit user posted their fiancé had $390,000 in student loan debt and they didn't know how to begin paying it back. This is just one example of the mess you may find yourself in when trying to pay off your student loan. Today, I am going to go over six practical ways to pay off your student loan. Before we begin, I want to emphasize...If you don't already have student loans, great! Run from them. If you already do, stop adding more and make a plan to pay off your student loan. Let's discuss how! There are so many other ways to pay for college that don't involve taking out the equivalent of a mortgage of loan debt to do so. Pick a different school or work through school. Take advantage of the local community college. The point is, there are other ways to complete school and complete it without accruing killer loans!
You need to have a solid plan on how to do this. Depending on loan forgiveness is not a plan to pay off your loan! I have coached since 2011 and have not had a single client or known of someone at all who got their student loans forgiven. In most programs, most commonly the Public Service Loan Forgiveness Program, they require 120 payments to even be considered. That is ten years worth of payments and, even then, you still have to go through a rigorous application process and receive approval. It is not a given!
The first applicants weren't even eligible until 2017 and I have yet to meet one person who has qualified. There is always a technicality or reason why they are not approved. What is forgivable is considered taxable income and owed immediately at tax filing time. If your plan is to be forgiven of student loan debt, understand it is a pipe dream and will result in thousands of dollars of taxes owed. Instead, be proactive!
Get to hustling. Building in a side hustle is best for combating loan debt. Your income is your most powerful wealth building tool and one step toward becoming wealthy is eliminating debt. Get creative! Utilize that degree you are still paying for and think outside the box. Deliver pizzas or tutor someone. Whatever it is, now is the time to prove you can do it! For more ideas on developing profitable side hustles, visit last week's video, "20 Side Hustles to Attack and Profit from Right Now."
If you can combine this strategy of earning more with my next tip, you will really start to chip away at and pay off your student loan.
I know this is the least fun but it is better than being indebted to your student loans forever. There are many ways to reduce your expenses and sitting down with a coach, one-on-one, can help. What are some additional ways you can do that?
I know it is not the ideal situation, but imagine if you didn't have those huge housing costs?
Bunk up on the cheap! Living in the inexpensive but safe part of town with a few roommates is one way to keep your expenses low. Make sure you select responsible roommates, with one serving as administrator for the household, to ensure rent is collected and bills are paid on time. Have clear boundaries you all agree on and sign something together so you aren't left in the lurch should they flake.
Living on a real budget is a way to protect your dollars and keep you on track to reach your goals.
There are thousands of things that can distract us from the best plan. For more information on how to build a strong budget, check out my previous post, "How to Build a Strong Budget that Sticks!"
This should get the least of your attention and not be the first thing you take action on; however, if your interest rates are 6% or higher, you may want to do some research on what options are out there. Student loans are often so large and require specialized programs, so be very wary and read the fine print. Consult your coach on the best strategy because refinances are rarely helpful. However, with the options out there, it is something to consider or look into. If the refinance requires a consolidation, I would likely turn it down. If you consolidate, you take away your ability to compound your efforts, which leads us to our last point...
Most commonly, student loans are structured to be paid in one minimum payment; however, they are not one single loan. They are actually multiple loans with differing rates rolled into one.
Instead, get all the specific, individual loan balances, interest rates, and (if available) minimum payments and put them into a debt snowball. Then pay down your loans by focusing your attention on the smallest and inquiring with your loan debtor the best method to ensure all dollars are directed towards paying principal. For more specifics on how the debt snowball works, watch my previous video, "How to Crush Debt for Good!" Get angry, get aggressive, and don't settle for staying in student loan debt for the rest of your life. There is hope! You too can pay off your student loan and find more money to fund your dreams!
Question: Do you have crushing loan debt? Are you ready to pay off your student loan and crush that debt for good? Reach out to me today to continue the conversation on how to do just that. Be sure to also check out my free e-book to help you on your journey to financial freedom.
I hope you found this information helpful. Feel free to join my FREE Facebook community, The “Strong Together Money Community.” Post pictures or share some of your side hustles that help fund your dreams.