Financial Wellness
Graduated College with Debt? Here's How to Pay It Off Fast
If you’ve graduated college with student loans, the idea of paying them back for the next 10 years or more might seem downright depressing. The good news? It’s possible to accelerate your loan payments and shed that debt sooner. Here are a few ways to get rid of student debt quickly.
1. Refinance your loans to a lower interest rate
If you have good credit, refinancing your student loans is something worth pursuing. When you refinance, you swap an old loan for a new one, only that new loan has a lower interest rate attached to it, which lowers your monthly payment. Now here’s the trick: If you refinance so that your loan payments go down but you continue making the initial higher payment you’re used to, you’ll get rid of that debt faster.
Keep in mind that if you took out federal student loans for college, refinancing may not make sense, since those loans already come with a pretty low interest rate. But if you borrowed privately, it’s an option worth looking into.
2. Live frugally
The less money you spend on living costs, the more cash you’ll have available to pay down your student debt ahead of schedule. To that end, it helps to set up a budget and see where there’s room in your monthly spending to cut corners. Getting rid of the streaming services you rarely use and canceling your gym membership could put cash in your pocket that helps whittle down your loan balance at a more rapid speed.
3. Move back home
It may not seem like an appealing option at first, but moving back home could help you eliminate your student debt in no time. Of course, that assumes you’ll mostly get to live rent-free, but if that’s the case, the money you’re not spending on essentials like housing and utilities could instead go toward your loan balance.
4. Work a side job
If your primary job doesn’t leave you with much room to make extra payments toward your student loans, try getting a second one. Side hustles are all the rage these days, and you can earn your extra cash doing something you love, whether it’s crafting, cooking, or spending time with other people’s pets.
5. Use windfalls to pay down your debt
Many of us come into extra money during the year. You might get a tax refund after submitting your return. You might snag a performance bonus at work. Or a family member might shower you with a generous birthday or holiday gift of cold, hard cash. No matter where that money comes from, if you pledge to use it to pay down your debt, you’ll dig yourself out of that hole much sooner.
6. Find an employer that offers student loan repayment assistance
Employers are increasingly stepping up to help employees manage their student debt. Some even offer money toward student loans as part of their workplace benefits package. Now there is a catch -- usually you’ll have to commit to staying with that employer for a certain period of time; otherwise, you’ll be forced to pay back any money you received for your student loans. But if you land a good job that offers this benefit and are willing to stay put for a while, it’s a good way to rid yourself of student debt ahead of schedule.
Paying off student debt is no fun, so the sooner you’re able to do it, the better. Follow these tips, and with any luck, you’ll be debt-free before you know it.
This article was written by Maurie Backman from The Motley Fool and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
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The views expressed by the author are not necessarily those of MetLife and are solely the opinions of the author. Nothing in these materials is intended to be advice for a particular situation or individual.