WinCU Family & Friends Blog
Tips for Paying Off Student Debt
As a college graduate, I know how demanding higher education can be on finances. Luckily, for our family, my husband and I didn’t take on a lot of debt and 10-years after graduation our student loans are payed off.
But, times have changed and college is considerably more expensive and loan amounts can be staggering. Americans owe about $1.5 trillion in student loans. Which isn’t a fun statistic...if you find yourself taxed by student loans here are a few tips for paying them off.
Get a part-time job. If you can get a part time job to make some extra cash you can apply all of that extra paycheck to paying down those annoying student loans.
Pay off the loan with the lowest balance first. Then roll that payment into the next loan once it is paid off. So for example, you have 3 loans one for $3,000 with a $200 payment, second one for $10,000 and a $250 payment and a 3rd for $25,000 with a $300 payment. So, you have a total of $750/month in payments. Focus on putting the extra money that you can towards paying off that one that has the balance for $3,000, once you get that paid off apply full payment to the next smallest student loan; keeping your total payments at $750.
Don’t pay just the minimums. This kind of goes off of the first two tips but it deserves its own line. When you can afford to pay extra it goes a long way. Don’t however pay more on the student loans and neglect paying other higher interest debts like credit cards.
Large lump sum payments. Some people use their tax return or maybe an inheritance to spoil themselves with a big trip or a large purchase but put that extra cash towards your student loans. That trip to Mexico can wait until you have the student loans paid off.
Consolidate your student loans. Instead of trying to manage all the different student loans you can consolidate them all into one.
Rework your budget. Review your budget and find places that you can tighten up a little bit and put that savings towards your student loans. One of my favorite tips is contact your cell phone, cable, Internet, home phone, and insurance companies to see if they can get you a better deal. This is something that I do once a year to make sure you are getting the best deal. Some people don’t review their insurance because they have an agent, however even though you trust your agent, if you shop around they can usually find a better deal for you if its been a while since you reviewed your prices.
Sometimes student loans can seem overwhelming because it’s almost like another mortgage payment or a couple of car payments, but you aren’t alone. Stay positive and keep moving forward!