The total student loan debt in the United States is at over $1.60 trillion. It almost feels like a dream to pay off a student loan. With the right approach though, it isn’t that difficult.
Student loan debts are just like any other debt. Do not take this out of your mind as it is one of the most common mistakes that people make. However, perhaps the only difference compared to other types of loans is the monthly payments. Student loan payments are significantly lower than any other loan that there is. This is one of the reasons why it takes so long to pay off a student loan.
It is understandable if you finally came to the conclusion to say it’s enough. In this article, we will give you tips that will make you pay off your student loan debt faster.
Budgeting and Making Payments
First things first, if you’re not already living on a budget, do so not only you’ll pay off your student loan but save more. Having a monthly budget on the things you need and not spending more than your budget is going to make a huge difference.
Although you can put the extra amount that you’re left with towards paying off your student loan debt, it comes down to what you prefer. We recommend keeping at least a sum of what you’re left with every month towards a savings account.
Another must-do thing is paying more than the minimum payment. You can only pay off your debt at a considerably slower rate with the minimum payment. To take things further in time, pay in advance and pay as much as you can. After all, every single dollar you put over the minimum payment amount gets you only closer to being student loan debt-free.
Student Loan Over Bonuses
Receiving a financial bonus or a raise from your work is likely to increase your living standards. But to pay off your student loan debt, you must make sacrifices. So instead of making a next big purchase that you’re comfortable with the bonus or the raise that you got, forward it to the student loan.
The same goes for anything that isn’t a stable income like your tax refund. Instead of buying something with the money you got in your hand that you wouldn’t be comfortable but now you are because of what you’re holding, make an extra payment to your student loan debt.
Overall, living just below your standards and making more payments is the right approach when it comes to paying off a student loan entirely. We strongly recommend sticking to this. By doing it this way, you can pay off your student loan debt in less than half the time you’d normally do. More financial advice regards to debt and credit can be read on our other articles.