Five Ways to Pay Off Student Loans
By Janice Forrest
Going to college was the easy part. Paying off your student loans is the hard part. And if you’re not careful, it may take you a lifetime to do it. In the meantime, making your monthly student loan payments for the next ten, fifteen or thirty years will leave you feeling drained.
Some Startling Facts
According to Finaid.org, student loan payments are strangling a lot of college graduates. They offer some startling facts. For example:
• 65% of 4 year undergraduate students graduate with student loan debt.
• The average student loan debt is over $23,000.
• 14.6% of student loan borrowers graduated with over $40,000 in debt.
Instead of spending a lifetime digging out of student loan debt, the smart graduate will work to pay off their educational loans early. By creating a plan and sticking to it, student loan borrowers can pay off a small loan in one to three years and a moderate loan in four to six years.
Five Ways to Pay Off Your Student Loans
Here are five way things you can do to get out from under your student loans early so you can stop paying and start living.
1. Eliminate extras: Cut out designer coffee, movie nights and dinners on the town. You can use the cash you save to pay down your student loan debts.
2. Sell your car: The money you spend on car payments, insurance and gas can be reallocated to lightening your debt load. Use public transportation or get a bike.
3. Move home: Getting out from under Mom and Dad’s thumb may be a dream- come-true. But if you stay at home for an extra year you can chip off a big chunk of your debt.
4. Take a second, or third, job: By taking a minimum wage job and working twenty extra hours a week you can earn seven thousand additional dollars towards your student loans in one year.
5. Sell your stuff: It’s just stuff. And most of it you probably don’t need. Cashing out your trash will help slice your student loans.
What Not To Do
Don’t be tempted or get too creative. You may regret it. Some solutions may seem attractive at first, but in the end, they’re a recipe for trouble. Here are a few tricks you’ll want to avoid:
1. Skipping payments: If you fail to pay your student loans or don’t pay on time, your credit rating may be adversely impacted.
2. Using your credit card or a home equity loan: Rolling your educational debt into another loan won’t solve your problem. It will just create more debt.
3. Cashing out your retirement funds: If you tap into a 401K plan, you’ll likely take a big tax hit. In the end, you’ll end up losing money instead of saving.
Don’t spend the rest of your life paying off your student loan debts. Make a plan and stick to it. If you do, you’ll be out of debt before you know it.