Paying off student debt can seem impossible from this perspective, especially if you needed to pull out extra loans to pay for housing while you were in school. And the debt itself is one monster with a little minion on the side called interest. It grows and grows and never seems to stop. But there’s hope. Not only can you pay off your student debt—completely, as in zero-balance, never-answer-a-call-from-a-collector-again DONE—but you can also pay it off with lightning speed.
Here are 6 tips to pay off student loan debt fast:
1. Make Payments Every Two Weeks
Make payments every two weeks instead of once a month. This may sound like it’ll come out to the same amount of money, but about twice a year, you’ll actually be able to make extra payments using this method.
Here’s what we mean: Let’s say your loan payment each month is $265. If you split this up into two payments of $132.50, you’ll pay $3,445 by the end of the year. (That’s $132.50 times 26 two-week pay periods, totaling $3,445.) If you stuck with your monthly payment of $265, you would only have paid $3,180. ($265 times 12 months in a year equals $3,180.)
That’s a $265 difference! And one you’ll barely notice out of your monthly income, as your extra paycheck during a month usually comes as a surprise.
2. Make Surprise Payments with Surprise Money
Speaking of surprises: If you come by a little extra pocket money, seemingly out of nowhere, do not spend it! We repeat: Do not go out and make it rain! Put this money toward your loans, so you can pay them off faster.
We can hear you from here: “Where would I get surprise money?” Well, from lots of places, actually:
- Your Tax Return
- Yearly Bonus
- Gambling Winnings
- A Payment from a Large Freelance Gig
- Cash Awards
- Company Profit Sharing
- A Large Sum of Money on the Sidewalk
Just kidding about that one point, but you see what we’re saying? You can be surprised with money in a lot of different ways. And while your impulse might be to blow it on traveling, new tattoos, or exceptional chicken sandwiches at Popeye’s, you should use your new powers for good and not evil. (Read: put it toward your student loans.)
Here’s a good rule of thumb when determining how much of the unplanned income should go to your loans:
- 50% Student Debt
- 30% Savings
- 20% Traveling/Tattoos/Chicken Sandwiches
3. Reduce Your Monthly Expenses
Another way you can be pleasantly surprised by money is by reducing your monthly expenses. We know: You really, really need all the things you’ve been paying for. Rent, electricity, water, groceries—you literally need those things to survive.
But have you taken a closer look?
We’re talking, of course, about your subscriptions. Those Instagram ads really got to you, and now suddenly, you have a clothing subscription, a date night subscription, eight streaming services, a few book subscriptions, a rotating pet subscription, and all kinds of other things.
Here are some ways you can reduce your spending:
a. If you don’t use it, cancel it.
That’s sounds like common sense, right? Yet you have that gym membership you never use and the Gold subscription to Audible where you got two audiobooks a month, but you don’t have time to listen to them.
Cancel your gym membership, if you don’t go to the gym.
Reduce or cancel your Audible membership, if you don’t have time to listen to audiobooks.
Pay for the things you use right now, not the things you might want to use in the future.
b. Don’t pay for apps.
If the app isn’t free, don’t download it. You may think, “Oh, it’s only 99 cents!” but how often do you think that in a month? Even if it’s just adding up to $5, that’s $5 you could have been saving or putting toward your student loans.
And please, don’t make in-app purchases. You do not need the extra lives in Candy Crush that badly.
c. Cook for yourself and stop eating out.
If you look through your spending during each month, you’ll probably find that you spend the most money on eating out. A five-dollar coffee here, a ten-dollar, fast-casual lunch there—it adds up. Fast.
Instead, look up some recipes you would be interested in trying and make them at home. You can find inspiration on Pinterest or by following a food influencer on social media.
Please, note: When we say, “Cook for yourself,” we do not mean, “Get a subscription for an ingredient-delivery service.” Those things are especially expensive, and they don’t even cover all of your meals during the day, usually. Go to the grocery store and purchase the ingredients there. It’s astronomically cheaper.
d. Shop at thrift stores.
Quit your clothing rental and/or delivery subscription, and shop at thrift stores. We know that thrift stores have a bad rap, but shopping at them is cheaper than buying new clothes and more environmentally responsible.
You can find fashionable, name-brand clothes for a fraction of the cost at thrift stores, especially popular ones like Buffalo Exchange, Plato’s Closet, and Upscale Cheapskate.
e. Look through your bank statements and see if there are surprises.
You may have thought you already canceled a subscription, or you may be overpaying for a service. Check your bank statement or log on to your bank app and review your debit card activity. You may be surprised to find your massage membership didn’t get canceled after all.
f. Consider free alternatives.
This is it: the moment you’ve been waiting for. Here’s a list of free alternatives to every monthly subscription we can think of:
- Instead of a gym membership, use the gym in your apartment complex or watch workout videos on YouTube.
- Instead of paying for a music subscription, get a free one with ads, listen to the radio, or watch the music videos on YouTube.
- Instead of paying for an audiobook subscription, get a library card. You can download an app called Libby, which allows you to enter your library card number and instantly download FREE audiobooks and eBooks.
- Instead of paying to stream movies and TV shows, check out DVDs from the library.
- Instead of paying for a self-love/get-to-know-yourself subscription, look up methods of self-care online.
- Instead of paying for a meditation app, meditate.
- Instead of paying for a date night subscription, look up cute, FREE ideas for date nights online.
- Instead of paying for a therapy app, see if you’re eligible for some free therapy sessions at a reduced-cost clinic in your area.
- Instead of paying for a massage membership, lay on a tennis ball to get the knots out of your back.
Once you cut back on your subscriptions, you’ll be blown away by how much money you’ll have left over at the end of each month. Save some, spend a little, but put most of it toward your student loans to pay them off faster.
4. When You Get a Raise, Don’t Raise Your Monthly Expenses
Most jobs come with at least a standard 3% raise to accommodate the rise in cost of living during the year. If you hustle really hard, you might even get more. You could be incentivized suddenly with a bonus structure that wasn’t initially in your offer letter.
All of these are great things! Instead of moving to a larger, more expensive apartment or house, where your electricity and water bills will go up too, why don’t you put that extra consistent income toward your student loans?
We don’t know your situation: It’s possible that you need a larger place because your household has grown. But if it’s not dire, don’t do it. Live below your means, so you can get the big place later, when you don’t have to worry about paying for student loans.
5. Make Payments toward the Interest during Your Grace Period
Perhaps you’re reading this blog during your grace period. With your student debt looming over you, you’re doing research to see how you can fight back. That’s some good initiative!
Or: you are entering a grad school program, which would mean you can put off paying your student loans from your undergrad program a little longer, while simultaneously accruing more debt. Depending on your field of study, this could also be a good move.
But what would show even more initiative and be an even better move would be this: making payments toward your interest during your grace period.
You see, it’s the interest that sneaks up on you. It’s the reason it seems like your student debt will live on longer than you will. If you’re making payments toward the interest, even while you don’t have to make payments toward the loans themselves, you’ll be ahead of the game, and your debt won’t seem so daunting when you actually have to start making payments.
6. Reduce Your Debt with a Debt Reduction Solution
“Reduce my debt? Just like that?” Yes. Just like that.
First, you have to reach out to someone for a debt consultation. Debt is tricky, and it’s best to talk to a professional about how you can reduce your debt. The licensed, trained professionals at NDRS can help with that. By scheduling your free consultation, you’re that much closer to paying off your student loan debt fast.
Once you enroll in our program, we have your back. We’re your debt negotiator, working to reduce your monthly payments AND your overall debt. We just ask that you not rack up any additional debt while we’re working to get your current student debt paid off.
For more information about this program, contact us today. Just by reading this article and clicking the “contact us” link, you’re one step closer to being debt free.