5 Ways to Pay off Student Loan Fast and Cheap

Having a college degree is extremely valuable and many people say that you can’t put a price on high-quality education. However, the number of those who can’t pay off their student loan debt even after retirement is increasing.

Paying off a student loan is a burning issue for many people who are well past the age of forty, not to mention millennials who are facing unprecedented education costs.

If you want to pay off your student loan debt fast, but you are not so good at personal finance, take a look at our five effective tips.

Consolidate and Refinance

One of the most efficient ways to repay your student loan relatively easily is to consolidate all your student loans into one.

When you refinance your loans, you will have one loan with a lower interest rate. In other words, you will need less time to pay off the entire loan because more money will go toward the principal amount.

However, you should note that refinancing can be done only through private lenders. This means that you could lose some of the protections if you choose to refinance a federal loan.

Also, refinancing federal loans can make the repayment period longer, costing you more in interest payments.

Get on a Budget

Loan debt is to be taken seriously. Therefore, you can’t go around spending money like a drunken sailor.

Instead, what you need to do is to create a monthly budget and trim your expenses. Even though you may not like this at first, you will find it easy once you get used to it.

This means that you will have to cancel or at least reduce expenses like your cable TV, eating out in fancy restaurants, buying limited-release shoes, etc.

Why the long face? The good news is that you won’t have to do this forever, just until you repay your loan in full.

Get a Job That Offers Loan Forgiveness

You probably know that certain jobs can ‘forgive’ your student loan. These are positions focusing on work in government, the nonprofit sector and education.

Besides federal, there are also state-based forgiveness programs for those who aspire to be healthcare professionals, teachers, or have similar jobs.

The only catch here is to meet program requirements. However, these requirements may turn out to be unacceptable to you, so be careful when considering this option.

Do a Balance Transfer

A balance transfer is transferring your debt from one credit card to another. If you have a credit card with a higher APR and another with a lower APR, transferring the debt to the card with a lower interest will save you money.

The best time to do this is when you have a new credit card with an introductory APR that can go as low as 0%. This will save you significant amounts of money and allow you to apply that money toward your student loan.

Find a Part-time Job

In case you have a lot of student debt, especially private loan debt, what you could do is to find a part-time job while still in college. Also, if you are no longer a student and already have a full-time job, an extra gig will help you earn more money.

In both cases, try to look for a job that will make working worth the time you invest. Take inventory of your skills and carefully explore all the options you have. When you start to work, make sure you apply all the extra money toward repaying your student loan.

Apply Your Raises to Make More than a Minimum Payment

If you work at a serious company, annual raises should be an integral part of your work experience. If this is the case, then now is the perfect time to reconsider how you spend this money.

Instead of buying the stuff you don’t really need, take your raises and add them to your loan payments. When you make more than a minimum monthly payment, you will reduce the debt more efficiently, since the extra money will go toward your principal.

A great trick to do this effectively is to set up automatic payments with the extra amount added in, preventing your indecisiveness from interfering.