While a college education will give you a jumpstart on your career, student loan debt can hold you back financially. According to wsj.com, the average college graduate from the class of 2015 has over $35,000 to pay back for student loan debt! Around 71% of undergraduate students have student loans. Only 29% of students are paying for their education without debt.
If you are part of the 71%, don’t be too alarmed. The good news is you can pay off those student loans sooner rather than later. By becoming serious about getting out of debt, you can wipe out the student loans but it will take patience and perseverance.
1) Get serious about paying off the debt – Make up your mind to pay the debt off quickly. Don’t wait until 6 months after you graduate to begin making payments. Start as soon as you can to help lower the amount of interest you will have to pay.
2) Make sacrifices now that will speed up the process – There are certainly items that just aren’t absolutely necessary so look for ways to cut costs in order to pay more on the student loan debt. Delay gratification for a while until you can afford it.
3) Pay more than the minimum payment – Pay as much over the minimum payment as you can each month. It may not seem like much of an effort to pay an extra $20 or $25 per month but it will begin to make a difference quickly. By paying down the principal of the loan you will save interest. Use the calculator at the following website to see the affects of paying more your debt: http://www.bankrate.com/calculators/credit-cards/student-loan-debt-calculator.aspx
4) Don’t live beyond your means when you get a job – Avoid raising your standard of living right from the start. Get that student debt out of the way first. If you could survive before you graduated college you should still be able to survive a little longer while chiseling down that debt.
5) Look for discounts – Check with your financial institution to see if they offer discounts for early payment or for automatic deductions. You might save several dollars a month with these discounts and the amount saved could be used to speed up the payoff process.
6) Use an amortization schedule to track your payments – As a motivational tool, watch the balance of your loan decline after each payment. An amortization schedule can be used to show the progress in paying off your loan. A free loan amortization calculator that you can use is found at http://www.amortization-calc.com/.
7) Make a budget for getting out of debt – Create a doable budget that targets getting out of debt. Follow the budget and make adjustments as necessary to keep you on track for paying off your loans and building your wealth.
By staying on task and committed to paying that student debt off quickly you will save money that can be used to build a stronger financial future for yourself and your family. Make it a financial priority today to alleviate those dreaded student loans! You will be thankful you did.