If you carry any sort of student loan debt, it’s highly likely you’re doing everything you can to pay it off as quickly as possible.
Even if you think you’ve exhausted every student loan repayment option, there might be some strategies worth exploring you haven’t tried out yet.
Money expert Dave Ramsey shared a post on his website, Ramsey Solutions about eight different approaches you can take to pay down student debt. Check out these eight ways to pay off student loans fast.
1. Pay More Than the Minimum Payment
Each month, your student loan statement will state the minimum amount due that you need to pay. The general recommendation is to pay more than the minimum due, whether you’re able to put several hundred more dollars towards this balance or just $50 leftover in your monthly budget.
Why make more than the minimum payment? The answer goes back to paying off student loans fast. Making larger payments will help you pay down your debt faster than if you continue to make small, minimum payments. When you start making payments which go beyond the minimum amount due, the post on Ramsey Solutions recommends telling your loan servicer to apply the extra payment to your current loan balance. Otherwise, this amount may be put towards next month’s payment, and this doesn’t mean your loan gets paid off any faster.
Among the many benefits of budgeting, which include getting out of debt and establishing a plan for your money, you’ll even start to find extra money you didn’t know you had.
This extra money can be put towards paying off your loans and getting out of student debt sooner than later. If you’re not already on a budget, now is the time to get on one and stick to it.
3. Cut Back Your Spending
Look at your spending habits closely and determine which aspects of your lifestyle you can cut back to save money which can go towards paying off your student loans.
You might decide to stop subscribing to streaming services, cook your meals instead of going out to eat or move in with a roommate for a year.
Remember: these sacrifices are not designed to last forever. They are only temporary as you work to pay off your student debt.
4. Increase Your Income
As you’re finding creative ways to cut back on non-essential spending, consider your options for increasing your income and putting this extra income towards paying down student debt.
What can you do? You might start working a side hustle or get a part-time job in your spare time, ask your employer for a raise (if you’re due for one) or upskill to find a better paying full-time job.
5. Consider Refinancing Your Loans
This option should only be considered if it makes sense for your specific financial situation.
According to Ramsey Solutions, borrowers should only refinance their student loans if they can get a lower interest rate, don’t have to sign up for a longer repayment period and get to keep their fixed rate.
Other refinancing considerations for borrowers include making sure it’s 100% free, you don’t need a cosigner and to ask yourself if refinancing genuinely will motivate you to pay off student debt fast.
6. Avoid Income-Driven Repayment Plans (IDRs)
Many student loan borrowers turn to income-driven repayment plans (IDRs) if they qualify for it.
An income-driven repayment plan is an affordable payment plan for federal student loans. Getting on an IDR helps create low monthly payments which keeps loans from defaulting. An IDR plan also offers forgiveness options through PSLF and IDR forgiveness.
However, the post on Ramsey Solutions does not recommend borrowers enroll in IDRs. If you want to pay off student loans fast, an IDR will make this progress much slower for borrowers.
7. Don’t Bank on Student Loan Forgiveness
Borrowers can wish for widespread student loan forgiveness, but it’s highly unlikely to happen.
As the post on Ramsey Solutions reads, forgiveness isn’t guaranteed. The best approach is to take responsibility for your debt and utilize some of the strategies mentioned in this article to pay it off.
8. Prioritize Paying Off Student Loans
If you have student loan debt, your top financial goal should be to pay off this debt in full and as soon as possible.
Do not drag out these payments and keep carrying this debt for years, or decades, of your life. The quicker you pay off this debt in full, the faster you can progress to reaching other financial goals and build the life you want.
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