Student debt is a growing concern among millennials. It delays how soon they can purchase their own home, how soon they can comfortably have children, and hinders the quality of life they can enjoy post-graduation.
If you’ve gone through a undergraduate program and then on through a graduate program, chances are you have tens of thousands of dollars in debt and you’re looking for a way out as soon as possible.
It’s always advisable to pay off student loans as soon as possible because the interest adds up. If you have $60,000 in debt and you’re on a 25-year plan at only 4% interest, you’ll end up paying a total of $95,000.
So how can you pay your debt off ahead of time?
1. Find Some Side Action
The freelance market is currently booming with sites gaining serious momentum for those who have a particular skill, whether that’s writing, graphic design, web development, or a number of other serviceable commodities. Even if you went to school for something less transferable online, such as an , you can still be creative by developing a residents or writing an ebook for beginners. Making cash on the side to directly funnel into your loans can give you a serious advantage.
2. Negotiate Your Salary
When you’re interviewing for positions, there will come a time to negotiate your salary. Use this opportunity to see if your potential employer is willing to pay off a portion of your loans. Some employers will even be willing to pay off your entire balance. It may feel awkward to ask, but they require someone who has your level of expertise. They should be willing to help foot the bill.
3. Decide What Loans to Pay First
When you pay off your student loans you should harbor a payment strategy. Instead of paying a little bit on each loan, choose one loan to target first. The loan you target could be the loan with the highest interest, the largest loan, or the smallest. If you start by paying off the highest interest loan, work your way down each loan by subsequent amount of interested to save the most money over time.
4. Consolidate & Refinance
There are many loan refinancing companies out there, so do some research to see what works well for you. Loan refinancing and consolidation will earn you a better interest rate for your loans, saving you quite a bit of money if you plan to only pay your minimum monthly payments. Many companies can currently refinance your loans to under 3%, which is more reasonable than even the lowest US Government loan.
Paying off student debt isn’t fun, but it’s manageable with the right strategies. If you work hard by developing extra revenue streams and create a pay-off strategy you can finish repaying your loans well in advance of your final payment date and save thousands in avoided interest.