So, you’ve graduated. Crowned themselves with that cap, had a good cry
perhaps, and then got ready to conquer life as a boss! But wait… student
loans. But they’re persistently like that clingy ex that doesn’t stop texting
after the breakup. But don’t worry, I have got you covered. Let’s get it
cracking and go over some tips on how to pay off those loans faster than
Netflix releases the next season of your favorite show.
Step 1: Face the Reality
First things first: stop thinking that the student loan balance you have is
some number you’re going to worry about later. You don’t consider it
because it’s much like not paying attention to a fire alarm just because you
think the house won’t burn down.
Take out your loan statement (don’t look so frightened) and let me assist
you to determine how much you need to pay and for how long—without
mortgaging an organ on the dark web. This is where the process of working
starts.
Step 2: Get acquainted with the tools that will help you
Fortunately, unlike our forefathers, we live in the 21st century and we have
tools and calculators that help us do all the arithmetic (let us praise the
gods of technology). Let’s take a look at what tools you need to set yourself
free and run towards the path of financial freedom.
Loan Simulator by Federal Student Aid
It’s kind of like the Sorting Hat from Harry Potter, only instead of
informing the student that they are now part of Slytherin, it tells the
listener which repayment plan is best for their financial journey.
Plug in your loan amount, incident income, and desired frequency of
freedom.
Boom! The best repayment plan regarding the debt surfaces from it. Accio,
lower debt!
Example: If you just got your first job out of college and you owe $100,000
for a car that is not a Lamborghini but dream of paying it off in five years,
this calculator will help you know what your monthly payments will be. It is
a great device to enable those immense ideas to conform to little or no
money.
Unbury.Me
Alright, let the name do the CK-making vibes. What a relief! This is a great
tool.
You plug in your loan info, and it shows you two options: the avalanche
strategy (starting with high interest debt) and the snowball strategy
(starting with small balances).
It’s more or less like deciding if you want to tackle your giant pain in the
neck or your many, little ones. Spoiler: Both will get you to freedom, but the
avalanche normally ends up being cheaper for you.
Example: For illustration purposes, suppose that you are in a total liability
of $20000, $3000 at 8% interest and $17000 at 3% interest. When you
load the Unbury.me pages, this service will recommend you take on that
high-interest 8% first. It’s like eliminating the newest, most bothersome
guest at the social gathering that is your life.
EveryDollar
This app makes you understand it is not the end of the month to spend all
your wages on takeout and have no money to spend for all your budgeting
newbies.
EveryDollar guides the creation of zero-based budgets where you allocate
every dollar for a specific purpose.
Call it the stock market version of a grumpy group chat admin. Not a penny
is going to the bar without your consent.
Example: It’s like if you’re saving $200 every month for “fun” and you
decide to be responsible and put $50 more toward loans. Balance, baby.
Step 3: Choose Your Repayment Style
Now, let’s talk strategy. You have choices, as you do when deciding which
TV show to catch up on next.
The Standard Repayment Plan (or, simply, the VR or the White Mug
without the Steamer Woof Woof and/or the Incredible Edible Chocolate
Cake Frosting)
The government says, “Pay your loans in 10 years,” and you as the borrower
respond with, “Okay.”
X amount of money is the same you pay monthly for a period of ten years.
It’s simple, and in the end, perfect—or at least, your life will be perfect (or
almost).
Example: When you agree to $350 monthly, that is what your monthly
contribution is and nothing more. It helps me to get by, to be content, and
not worry about the mediocre feeling a cup of coffee gives me, like ordering
the same thing at Starbucks again and again.
The Graduated Repayment Plan, otherwise known as the Fake It Till You
Make It plan.
This one’s for those of you who stared college with two dimes in your pocket
but plan to live large in a couple of years.
You are paid less initially and graduate to receiving more money as time
goes on. It’s like student loans conditioning it with, “At this we understand
you are poor now, tomorrow when you get that promotion…”
Example: If you begin as an intern but are on the ladder to the CEO, then
the plan leaves space for air in the initial periods and raises payments as
you are (hopefully) earning more.
Income-Driven Repayment Plans (for short, IDRs or The Chill Mode)
These plans offer you to pay depending on your income on a monthly basis.
Recommended for those who do not earn big bucks and indeed do not wish
to go broke all of a sudden. That’s the “no-pressure” plan—even better.
Example: If you’re getting paid through freelancing or have a low-wage job
after you finish school, your monthly payments could be as low as $100. It
will bring less payment at the start, and once you’re rolling in the dough,
then the payment will change. This is as if saying it’s the new-age, cool ‘n
formal, easy ‘n freestyle yoga of repayment plans.
Step 4: How to Turbocharge Your Payoff with Hacks
If you want to get fancy and pay off loans even faster, here’s how to level up:
Make Extra Payments
Simple but effective. Pay as much extra money as you can to your loan
balance. Birthday money? Tax refund? The ten bucks you once thought you
dropped at the local diner? Everything goes into your loan. #debtfreevibes
Round Up Your Payments
Instead of submitting $350, deliver $400. It may seem petty, but the
impact adds up big picture—sort of like replacing pop with water for your
daily beverage (oh wait, it actually does save you dough)!
Side Hustle Your Way Out
If you are determined to clear of loans faster, a side hustle is the best way to
consider. Dog walking, freelancing, selling items online—whatever the side
hustle, that money can go right to paying for your loan. Only don’t hustle so
much that you end up making yourself too exhausted. They still need you
alive to spend that money, which is free from debt.
Step 5: Stay Motivated
Let’s be real: Most people do not have fun when paying off their student
loans. But it is satisfying and as soon as you can get through and pay them
off as well as you possibly can, then you can really live the best of your
money life.
Anyway, imagine how this will feel like to be debt-free (what drama!).
Celebrate milestones. Did you knock off $5,000? Treat yourself! Just, you
know, not too much.
Stay disciplined. Oh, sure, one can always justify this purchase spree; just
think of how you’ll regret not buying this instead of saving.
Final Thoughts: It’s Possible, I Swear!
Getting out of student litigation might seem to be as easy as carrying a
boulder up a steep incline, however, the correct tools and methods see you
through faster than you could imagine. Plug in the calculators, select your
repayment option, and add more income streams, and you’ll be shouting
“DEBT-FREE!” shortly.