I am an advocate of paying off your student loans quickly. With the average graduates student loan bill coming in around $24,000 many feel overwhelmed with the standard 10 year repayment plan. This post is designed to show you ways how you can make a big dent in your student loan balance and get rid of the debt quickly.
Pick Up Additional Income
This can come in various forms. You can work overtime at your current employer, pick up a second job, or start your own side business to increase your income. Whatever you earn, you should be using all of it to pay down your student loan debt. I worked a full time job including overtime along with a part time job for a year after I graduated. I was able to pay off a healthy portion of my loans using this strategy.
Continue to Live Like You Are In College
Just because you have a job making a decent salary doesn’t mean you have to spend it all. Likewise, just because friends ask you to dinner or to go clubbing doesn’t mean you have to say yes. You can decline. Even better, offer alternative things to do. I remember my friends asking me to go out and I didn’t want to spend the money. At first I kept turning them down. Then I thought of a way to hang out with them for cheap: hosting game night at my house. I make everyone dinner and then we watch a movie or play board games. It was such a big hit, we rotate hosting duties now.
Not only your stuff, but other people’s stuff as well. Scope out yard, garage, and estate sales for items and turn around and sell them on eBay or Craigslist. But don’t just randomly buy things. Spend some time on eBay learning what sells and what doesn’t. To make it less time consuming, pick items that you know about too. That way you know what you are looking for when at the sales. The eBay app for your smartphone is also a good tool too when you are at the sale. When I was in college, my roommate and I used this strategy. I helped cover most of our living expenses and helped us have a little extra at month end.
Review Your Loan Agreement
Let’s be honest, most of us didn’t read what they were signing when it comes to student loans. If you are lucky, you may have some hidden perks in the agreement. Some student loans will shave off a quarter to a half of a percent of interest if you make a certain number of payments on time or if you sign up for direct debit. Lowering your interest rate will help you pay off your loans more quickly as more of your monthly payment will be going to the principal.
Use Windfalls as Payments
Any extra birthday or Christmas money can be put towards your student loans. Also, any tax refunds and bonuses from your job can go towards paying off the debt too.
Get Your Employer to Pay
If you are working for a private employer, this might be tough to do. But many government jobs will pay off $10,000 per year of your student loans up to a total of $60,000. Also, you can look into volunteer opportunities that will pay off a portion of your loans as well.
Negotiate Your Salary
If you are still looking for a job, be sure to negotiate for a higher starting salary. It may seem odd in the current economic climate, but it is doable and well worth it. Don’t accept a potential employer’s first offer. Come back with a counter-offer that is still reasonable.
If you already do have a job, then work hard and approach your employer six months before you are set for your review and talk about a raise. Doing it beforehand will increase your chances of getting more.
If you combine some of these tips, you will be amazed at how much you will be able to pay off your student loan debt and how quickly too.
This post was written by Don, a staff writer from MoneySmartGuides.