In a couple of months, I’m due to make my final payment on my student loans and I simply can’t wait. I’ve been dealing with student loans since my inaugural college year in 2010. I had to rely on loans each year to cover my tuition and other college expenses.
I hold great appreciation for my education, but the thought of a debt-free life is overwhelmingly exciting. I faced a student loan debt of approximately $21,000, which is slightly below the average national level. However, this sum is indeed significant to me. Back in 2014, I embarked on a 10-year repayment plan, but I was adamant about not waiting until 2024 to be debt-free.
The journey hasn’t been smooth sailing over the past two years. Lower income placed a bit of a financial strain on me. If you too are striving to clear your student loans at a faster pace, I’d like to share four strategies that I utilised to achieve this goal.
1. STAY FOCUSED ON YOUR DEBT REPAYMENT
If you aim to conquer your student loan repayments swiftly, it’s essential to fully commit – trounce your debts! For instance, I was rather infuriated with my debts. This outrageous engagement energised me enough to buckle down on loan repayments. It’s also beneficial to identify your motivation, bearing in mind your long-term goals.
Ridding yourself of loans early requires enormous motivation and dedication. There will be those days when your progression seems stagnant, the temptation to vacation may test your resolution, or an unexpected catastrophe may disrupt your plans. Despite these fluctuations, your determination must never waver.
2. MAINTAIN A STUDENT LIFESTYLE
I cannot stress how vital this step is. To repay your loans expeditiously, continue to live a student’s lifestyle post-graduation.
The stereotype “broke college student” can actually be used to your fiscal advantage. After I graduated, I secured an entry-level job approximately 40 minutes away from my college town 2-bedroom apartment where I smugly paid only $600 monthly in rent while simultaneously throwing extra money to my debt.
In contrast, the accommodations around my workplace cost approximately $1200 monthly. My living standards, therefore, permitted me to cut my housing costs right in half. I also made efforts to cook at home and make use of economical meal preparation appliances like a Crock-Pot, while also canceling my gym membership and reducing other day-to-day expenses.
3. ADOPT THE AVALANCHE METHOD
The Avalanche Method came in handy for me. Begin by focusing on the loan with the highest interest rate which in return saves you a significant amount of money over a long run. The strategy is simple; focus on one loan at the time, starting with the highest interest rate.
When making a payment, the bulk typically goes to clearing the interest, with the remaining amount shared among your loans. I’ve had to witness my minimum payments play out this way, but I’ve had control over my extra payments which I applied to the highest interest loan.
4. SEEK ADDITIONAL SOURCES FOR INCOME
Lastly, consider increasing your revenue. Early in my debt-free journey, I earned around $28,000/year. In addition to occasional raises and bonuses, I also supplemented my income with part-time gigs. Initially, I liaised with brands as an ambassador, then I ventured into freelance writing and virtual assistant roles. The surplus income I earned, in conjunction with my frugal living, accelerated my loan repayment efforts.
Debt is not a lifelong obligation; importantly, individuals are entitled to a life independent of owing money. Despite how burdensome student loans may appear, please note that they can be managed effectively. So, if you’re saddled with student loan debt, what plans do you have for repayment?
