Rumors have circulated concerning whether the student loan moratorium will be extended once more, but it’s becoming less and less likely. As it stands, all borrowers should prepare to start federal student loan repayments in September 2022, as outlined by the U.S. government.
How To Pay Off Student Loans Fast
The following 10 tips can help show people how to pay off student loans faster:
Try These Tips:
1. Cut Unnecessary Subscriptions
Did you know the average millennial is subscribed to 17 media and entertainment subscriptions? In addition to streaming services, this might include a gym membership, a newsletter, or a Patreon subscription that has been completely forgotten. Almost 42% have reported they were unaware that they pay for subscription services they no longer use.
Needless to say, there are generally at least one or two subscriptions that can be cut to save more money each month or year. Check automatic payments being made from bank apps or search for the words “subscription renewal” in your email inbox to target all the potential subscriptions that may be worth canceling.
If it’s the case that a subscription is deemed essential for work purposes or something similar, consider moving to an annual plan instead of monthly payments to save money on the cost of the subscription.
- Potential to cut costs fast
- Some subscriptions may be essential for work
2. Use Coupon Codes and Store Apps
Coupon code apps and grocery store apps can be excellent ways to save on fixed expenses each month. It doesn’t mean sacrificing quality, either. Fetch Rewards is an example of a discounting app that is partnered with thousands of popular brands for food, household items, as well as health and beauty.
Similarly, retailers such as Target have apps that will alert users when there are relevant discounts or sale windows to get customers more bang for their buck. Just make sure not to overspend or make compulsive purchases when using these apps.
- Savings on groceries and household items
- Users can end up buying unnecessary items
3. Make Grocery Lists
As handy as grocery store app discounters are, shoppers often tend to find themselves buying more than they should. By taking the time to prepare a list of exactly what you need before going to the store, you can save time browsing and only spend money on the essentials. This will add to long-term cost savings that can be used for repaying a student loan.
- Stops overbuying
- Can be time-consuming
4. Use Budgeting Apps
Another way to pay down student loan debt fast is by using the best budgeting apps. The advantage of apps such as PocketGuard is the ability to compile entire financial lives into one place to track all incoming and outgoing payments. They help you remain on top of your loan repayments in a manageable way while learning better money habits at the same time. The only downside is subscription pricing with some versions, so always opt for the free service.
- Great financial tools for managing inflows and outflows
- Increased services beyond the basic plan usually require payment
5. Limit Utility Expenses
Utilities are one of the sectors where costs are rising fast due to inflation — and they’re a silent killer. By remaining conscious of water usage, remembering to unplug appliances that aren’t being used, and simply adjusting thermostats, you can save hundreds of dollars each year. Although prices are mostly out of consumers’ control, switching providers may make sense to obtain price savings, too.
- Cost savings each year
- Rising utility prices are uncontrollable
6. Avoid Food Wastage
Preparing meals ahead of time and freezing leftovers can be excellent ways to maximize how much you get from your grocery spending. Although it can be tough to get into at first, it’s a useful habit to save more each month to put towards student loans.
- Environmentally friendly
- Cost savings
- Forming the habit can be difficult
7. Opt for Cheaper Entertainment Options
It’s important to keep a good social life but it shouldn’t break the bank. You can sub-in alternatives to physically attending movies and sports events by hosting events at home yourself or organizing meetups at a friend’s house. Prioritizing dining in over eating out can also serve as another option.
Taking up hobbies such as walking and running can let you explore new areas at zero cost. YouTube can be a great free alternative for learning and entertainment options, too.
- Cost-saving alternatives are available in abundance
- Limits social experiences
8. Pay Down and Transfer Credit Card Balances
Credit cards are part of many consumers’ daily lives. But, it’s essential to avoid sky-high annual percentage rates — the average is currently 17.3%. Pay down balances as soon as possible to avoid incurring extra costs and shop around for credit card promos that will offer 0% APR for introductory periods. Doing this will leave you with all of the benefits, but add more money to put toward loan repayments.
- Minimizes payable interest
- Requires research to find the best offers
9. Buy Store Brands
Store brands are generally cheaper as businesses complete all of the packaging in-house avoiding the need for advertising. Although store brands won’t always be up to the same standard, in many cases, there are cheaper options for generic products.
- Cheap alternatives
- The quality can be hit or miss
Homeowners may decide to refinance their mortgages to get better overall rates that lead to cost saving. As interest rates rise, it may be a good time to secure a better rate with lower monthly repayments now while it’s available.
If you have separate private student loans, you may want to consider refinancing these, too, to lock in lower rates. Certain companies such as SoFi specialize in this field.
- Long-term savings
- Rates can change in both directions
Is it smart to pay off student loans as soon as possible? Absolutely. Once the burden of student loans has been lifted, consumers open the doors to far more freedom without having to worry about lingering debt. The above tips should hopefully help you reach your goal faster.
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- Federal Student Aid. "COVID-19 Emergency Relief and Federal Student Aid."
- CNBC. 2022. "Consumers spend an average $133 more each month on subscriptions than they realize, study shows."
- Eat Right Pro. "Creating a Grocery List - Academy of Nutrition and Dietetics."
- CNET. 2022. "Save Money on Your Gas, Electric and Water Bills Now. Here's How."
- Love Hate Food Waste. "Five little wins to save money and reduce food waste."
- Rocket Mortgage. 2022 "Mortgage Refinancing: What Is It And How Does It Work?"