Want to Pay off Debt Faster? | Student Loan Repayment Strategies

Life is stressful and we worked all these years slaving in school finally made out the other side and unfortunately, we are not eligible for student loan forgiveness but fear not. There are ways that we can reduce the amount of money we owe quickly and try to get out of this cloud that is student loan debt.

Today we're gonna talk about different strategies that I've used myself and that you can use to pay down your student loans faster and be free of that.

Before you implement any of these strategies it's really important to see.

How much money you even owe and how long it's gonna take you.

When you have that information in mind you'll be able to really tailor your strategy to see how much more you need to pay to reach a goal of paying your loans by whatever time you want to pay them off.

Apply for any Extra Money on Your Student Loans

This is actually a two-for-one because when you pay down the loans that should also improve your credit score. I mean you knocking out two birds with one stone or if you are an animal activist feeding two birds with one scone when I say extra money I mean any pay raises any bonuses any tax money and you'll are you two good scratch-offs.

Do not go ahead and splurge that money to pay off your loans. You will think about your future self because you will have more access to your money faster I remember the lower your balance the lower interest you will make which is my second strategy.

Making two Payments a Month

Making one payment is already enough right why should I make two? because it's going to help reduce the amount of interest that you pay.

You don't have to make two payments you can just make half the payment in the first half of the month and the second payment at the end of the month. By doing this you're reducing your principal balance faster and when they're calculating the interest rate they're calculating on a smaller balance.

Now it sounds a little trivial but over time you'll end up really saving a good amount of money by doing this.

Now you guys know I'm not gonna make you to to work on your own I'm gonna back up what I'm saying with some numbers. 

Pay more than Your Monthly payment 

That's obviously intuitive we know that right but let me explain why that's important. When you make your first payment a portion of it goes to interest and the other portion goes to your principal. Anything extra you make should be going directly to your principal.

This means a dollar for dollar that money is working towards you reducing your liability and increasing your net worth. It also reduces the number of inches that you'll be paying.

Because like I said when you lower your principal balance when they're calculating your interest rate it's based on the principal.

If your principal is lower that means the lower interest you have to pay some lenders may not automatically apply it to your principal they may just apply it to your next payment. 

Please make sure you tell them to apply that thing to the lead principle because we do not want to pay anybody interest if we don't have to.

But don't just pay a little bit extra and leave it at that be very strategic with your payments make sure that extra payment is going to the highest interest rate loan because those are charging you the most interest which means it's less money going into your pocket. 

We want to get rid of those as fast as possible please apply any extra money to those once those are paid off and you can lump all that money into the next highest one and so on and so forth and I touched on this a little bit but when you make more money if you get a raise if you get a new job.

Do not inflate your lifestyle to pay off your debt, not just student loan debt any debt that you have okay I see people who make more money than all of a sudden they need a new car. All of a sudden they can only eat sushi through the sushi bar.

I mean they gonna get their nails done every two weeks they don't do that they're gonna die do not inflate your lifestyle please maintain the same life you're living right now handle all your debt then after that you can have more financial flexibility who doesn't wanna be more flexible.

Please try to keep that same life like I said so that you can be very aggressive with your savings with your investing with your debt paid out. 

You will really be thankful when you do that in the future you will have much more access to your money. You can make much more money moves to trust me once we don't owe anybody it'll be a really good feeling.

Consider Refinancing

Please only refinance if the interest rate will be less. You don't want to go through all the hassle of consolidation just to make one payment that's not gonna actually be less money. 

You want a lower interest rate because you want less money to go to the lenders and more money going to reducing these liabilities.

This method is good if you have a whole bunch of different student loans and you're making multiple payments everywhere it'll bring everything into a nice tight cute little bow and you make one payment a month or two if you're following my strategies right.