3 Strategies to Pay Off Your Student Loans Faster
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Sick and tired of your student loans? Do they seem to be nudging down too slowly while draining your monthly budget? Learn the best strategies and tactics to pay your student loans off faster!
Dealing with Student Loans
Student loans can be a weight on your monthly budget. The average student loan debt from a four-year public college is just over $20,000. With couples, the burden can be much higher.
If you two are looking to speed things up and get rid of your student loans faster, there's a fantastic project my buddy Robert over at College Investor is running.
He's put together the Student Loan Debt Movement. His goal is to help others to pay down, reduce, or eliminate $1,000,000 in student loan debt during the month of March!
Besides gathering resources and offering live Q&A sessions, he's giving away $500 each week to someone who's paying down their loans.
It's a very cool community that can help you put into place a plan to get rid of your debt.
I chatted with him this week to get you all the details as well as three strategies you can use with your student loans.
You can watch our chat here or read highlights of Robert's tips along with my thoughts below on tackling your student loans!
Best Strategies to Pay Off Your Student Loans Faster
Typically student loan balances are typically one of your larger debts (not counting your mortgage if you have one).
Though they may have lower interest rates than credit cards, many couples find them to be a drain on their monthly cash flow.
Get on the Correct Payment Plan
The first thing is you've got to do is make sure you're on a student loan repayment plan that makes financial sense for you.
It's great to be enthusiastic about paying down these loans but if you can't afford them in your current circumstance, you're harming yourselves.
There are so many different options.
- standard plan.
- Income-based repayment.
- Pay As You Earn (PAYE)
If you're using the Dave Ramsey's baby step plan or something similar you'll be holding back aggressively paying down these loans until you knock out the lower balanced ones.
Once your other debts are knocked out, like your credit cards and car loan, you can then use these newly freed up funds to pay off your student loans.
Student Loan Forgiveness
Everybody wants to loan forgiveness, right? Who wouldn't like someone to waive their loans away?
The cool thing is there are a lot of ways that you could potentially get it.
Of course, there are some cons you need to be aware of.
These student loan forgiveness programs take years. The public service program is 10 years, but some can go as long as 20, 25 years.
You should also know that there have been problems with some students finding out years later they were enrolled so you have to be on top of this if you're interested.
Refinancing Your Student Loans
Refinancing itself is really easy. There are so many online lenders that you could refinance your student loans in probably like 20 minutes.
Here's the thing – depending on the type of loan (federal or private) you have it may not be the best move for you.
So if you have federal student loans about 10 percent of people should look at refinancing.
The other 90 percent are probably going to benefit more from an income-driven repayment plan or student loan forgiveness program because you have to remember when you refinance you're now taking out a private loan that replace lots of protections.
If you want to get more information about the difference between federal and student loans, check out my interview with Jay Fleischman.
He's one of the top and most knowledgeable attorneys out there specializing in student loans and bankruptcy.
When we got together he went into detail on how to avoid student loan traps.
Now if you already have a private loan go for it try to find the lowest interest rate loan you possibly can get and save that money.
Thoughts on Paying Off Student Loans Faster
I'd love to hear from you. How much in student loans do you have? What's your strategy and timeline for paying it off?