The Student Loan Hack Your Lender Doesn’t Want You to Know… Pay Your Student Loans Faster!
How to Pay Off Student Loans Fast:
- Call your lender
- Ask them how to make payments to principal
- Check the window of time that you can make additional payments
- Make an additional payment to principal on your loan with the lowest balance, repeat monthly
The cost of Higher Education can be daunting. Many people take student loans to pay for all or a portion of their college, graduate, or postgraduate education. Unfortunately, that means starting adulthood in serious debt.
If you’re looking for the quickest way to pay your student loan off faster, watch this video and keep reading!
Stop Feeling Bad About Your Student Loan Debt
Your financial wellness is an important facet of your wellness recipe. Student loan debt can be crippling for your finances. Depending on your situation, loan debt can take a long time to pay off.
You don’t need to feel bad about your student loan debt, here’s why:
- Average student loan debt in America is $32,731
- If you have a graduate degree, that amount goes up to $66,000
- Over 43 million people have Direct, FFEL, or Perkins loans
- Student loan debt now totals over $1.56 trillion
How many people are in default?
- 10.8% of student borrowers default on their educational loans within their first year of repayment
- 25% of borrowers default within their first five years of repayment
- 10%-20% of student loans are currently in default
Clearly, with stats like these, you aren’t alone. So many of us were not able to pay for all of our higher education costs via our parents, scholarships, or 529 savings accounts.
So Why Are You Bumming?
Debt can be overwhelming. Period. It’s frustrating to be paying loans and have “nothing to show for it”. It’s annoying that your student loan debt preceded your career and you started life with a huge debt. You could be buying a house or investing that money.
I get it, I’ve had all those thoughts and more. Student loan debt sucks.
It’s like a feeling that you perpetually owe someone for doing you a favor backing the day. Plus mad interest. Ughh…
How can you get past this lack-mindset? Glad you asked!
Change Your Mind, Change the Student Loan Game
When we let our student loans take over our financial wellness we cannot move past the huge amount of debt we have. While student loans may take up a big portion of debt, treat them as if they are a priority that you can manage. You can decide how long it will take you to pay them off.
You don’t need to be on the 30-year plan your lender told you about the second you graduated and realized it was time to start paying. When you prioritize your student loans while paying your other debts, while working on your financial goals (buying a house, saving, etc.), while learning how to invest… your student loans become just one part of your financial wellness game. That game includes both positive financial health (ways of making, saving, and managing money) and negative income (paying debts).
When you change your mindset about your student loans to identify them as a healthy priority that contributes to your overall financial wellness, the feeling of overwhelm will diminish.
You will need to replace that feeling of exhaustion and burden with a financial incentive to celebrate when you pay off a loan or reach goals in paying off a certain amount of student loan debt.
Create incentives for yourself to pay your student loans faster
For example, when I paid off my small $2,000 loan, I put in $200 extra dollars to my savings the next month to replace the amount of the loan I paid each month. The following month I paid the minimum amount the lender required and allocated that extra $200 to the next smallest loan.
Using this method I never felt like I had extra money from the loan I paid off. I also felt good about the fact that I knew my other loans were being paid faster.
This was a 1-2 punch of an incentive. I got the immediate benefit of saving extra cash, and the long-term benefit of paying my other loans quicker.
How to Pay Off Student Loans Quickly
To pay off your student loans quickly, you need to focus on reducing the principal. Lenders make this a tricky task. Use the tips below and watch the video above for the exact steps.
- I stopped feeling awful about the total amount I owed.
- I started making smaller goals for myself based on each individual loan.
- I called my lender and asked questions about my billing cycle. (When does it start, when does it end, when can I make a payment to a specific loan online?)
- I identified the smallest loan amount and targeted it for special love each month.
- I paid extra to the loan I identified at the time that my lender identified.
- For me, this time period was AFTER my minimum payment was paid and BEFORE the start of my next billing cycle.
- For some loans you might not be able to pay extra towards principle online until a certain point in your billing cycle.
- Repeat every month until the loan is paid off.
Watch this video for more specific information about how to use this hack with a detailed explanation of what I did and how I did it. The concept is very easy to grasp but the devil is in the details and requires you to stop being overwhelmed and TAKE ACTION by calling your lender.
How has it worked for me?
I’m by no means done paying off my student loan debt. Here’s a little overview of where I was in 2019 and where I am today.
Grand total borrowed as of 5/2006: $80,670
Grand total paid between 5/2006 – 10/2019: $58,516
Total remaining at 10/2019: $41,109.10
Total remaining at 5/2021: $33,107.40
Overview of loans I’ve paid off (in order of extra payment priority)
|Original Amount||Amount Paid + Interest||Amount Owed May 2021|
*This amount is today’s pay-off amount. By paying them on schedule at the minimum rate I still owe $55,1010.30
**The total amount paid to these loans will not be known due to my loan being sold. This is the current information from 2011 to 2021. The amount paid before this time is unknown but is approximately $19,800.
The bottom line- Take Charge of Your Situation TODAY!
You are the only person who can take charge of your financial wellness. You are the person who can choose to stop being paralized by your student loans and develop a plan of action that will allow you to still save, invest, and pay off other debt.
- Don’t ignore your student loans or look for ways to avoid them.
- Do look into programs like student loan debt forgiveness,
- Do log into your lenders website and see what kind of information you can learn from each of your loans.
- Do develop a plan that will work for you that allows you to put extra money towards your loans when you have it.
- Do celebrate when you reach a milestone or an achievement by contributing to your overall financial well-being.