Student loan debt is a massive problem in the United States. According to recent data, over 1.5 trillion dollars of student loan debt is outstanding. If you are one of the millions of people struggling to pay off your student loans, don't worry, you are not alone. In this blog post, we will discuss ten creative ways that you can pay off your student loans. Some of these methods may be more applicable to you than others, but hopefully, you will find at least a few ideas here that can help you eliminate your student loan debt once and for all.
Creative Ways To Pay Off Student Loans
Student loans can be a huge burden, but there are plenty of creative ways to pay them off. Federal student loans have several repayment options, and you can also consider other methods, such as refinancing or taking out a home equity loan. Here are some ideas you may want to consider:
1. Make Extra Payments
Making extra payments is one of the easiest and most effective ways to repay student loan debt quickly. Even if you cannot afford to make large lump sum payments, you can make smaller, additional payments that can help reduce your overall student loan balance.
2. Refinance Your Loans
Refinancing your student loans may be a great way to lower your monthly payment and interest rate. Many companies offer student loan refinancing, so finding a company with terms that meet your needs is worth researching.
3. Use Any Extra Income
Any extra money that comes your way - from bonuses, tax returns, or side hustles - should go directly toward your student loan debt, and this will help you pay off your loans more quickly and save you money in the long run.
4. Get A Part-Time Job
Taking on a part-time job can help you earn extra income to pay off your student debt.
5. Ask Family And Friends For Help
If you have family or friends willing to lend a hand, ask them if they would be willing to help you with your student loan payments. This could be anything from helping out with one payment to offering an interest-free loan or setting up a payment plan that works for both of you.
6. Automate Your Payments
Setting up automatic payments is a great way to ensure you consistently pay your student loan debt on time and in full. This will also help you save money, as many lenders offer interest rate discounts for borrowers who set up automatic payments.
7. Try The Debt Snowball Method
The Debt Snowball Method is a method of paying off debt where you focus on paying off small debts first and then work your way up to larger ones. This method can be effective because it provides an initial sense of accomplishment that can motivate you to keep going and eventually get rid of your student loan debt. Student loan repayment calculators can help you determine your best repayment plan.
8. Negotiate With Your Lender
If you are having trouble making your student loan payments, don't hesitate to contact your loan servicer and see if they are willing to work with you. Many lenders understand that life happens and may be willing to offer options such as lower monthly payments or a loan modification.
9. Get A Personal Loan
If you have good credit, you can get a personal loan at a lower interest rate than your student loan debt. This can help you pay off your student loans more quickly and save you money in the long run.
10. Utilize Tax Breaks:
Depending on your student loan type, tax breaks available could help reduce the amount of taxes you owe each year. Be sure to consult with an accountant or financial coach to explore your options when taking advantage of tax breaks.
You can repay your student loan debt faster by utilizing the above methods. However, it is important to understand your financial situation before taking on any additional debt that could lead to further financial difficulties.
Is It Better To Pay Off Student Loans Or Wait For Forgiveness?
The answer to this question depends on your situation. If you can afford to pay off your student loans, it is typically better to do so sooner rather than later. Paying off your loans will reduce the interest that accumulates and could save you money in the long run. However, alternative options such as loan forgiveness or deferment may be worth considering if you are struggling financially or have a large debt.
Student loan forgiveness programs allow borrowers with federal student loans to have their remaining balance forgiven after making regular payments over a certain period (usually 10-25 years). Depending on the type of loan and program you qualify for, some or all of your debt may be eligible for complete loan forgiveness. Public service loan forgiveness is a popular option for borrowers who work in certain public service or nonprofit positions. Private student loans are not eligible for loan forgiveness programs, so if you have private student loans, your best option is to pay them off as soon as possible.
For borrowers who need more immediate relief, loan deferment or forbearance may be a better option. Deferment allows you to temporarily stop making payments on your student loans without incurring additional interest or late fees. Forbearance also stops collection activity, but it does accrue interest while the loan is in forbearance.
Ultimately, the best way to decide whether it’s better to pay off your student loans or wait for forgiveness depends on your circumstances and financial goals. Making student loan payments can be an overwhelming and stressful experience, but it doesn’t have to be. With the right strategy, you can make progress toward eliminating your student loan debt in a manageable way.
If you want to learn more about how to plan to pay off your student loans, contact us here at Bolder to talk to one of our Money Coaches. We can help you get started and set you on the path to financial freedom.
