Student loan debt can be crippling unless you handle it the right way. If you understand your situation and know what to do, you can eliminate your debt sooner and live more comfortably without that monkey on your back.
Here’s how you can achieve this:
- Be willing to sacrifice
Getting out of debt requires discipline. You must be willing to adjust your lifestyle to make your financial goals happen. This means evaluating and eliminating certain spending behaviors until you’re debt-free. To do this, make a budget and look for items you can eliminate. Generally, this means you will have to reduce the number of times you eat out, limit vacations and time away from work, buy clothes only when you absolutely need to and postpone buying that brand new TV or Smart Phone. While it may be hard to do at times, realize that the sacrifice you put in today will pay off big in the future.
- Find creative ways to make more cash
One of the best ways to pay off student loan debt is to find additional sources of cash. While the economy continues to be flat, there are opportunities to make money. For starters, you can use websites like Craigslist or eBay to sell old clothes or items you don’t use. Further, you can take on small, on-the-side jobs like doing yard work, cleaning homes, or babysitting. Lastly, you could find a part-time job delivering pizzas. Ultimately, no matter how you make it happen, your hard work will pay off as you are taking the steps necessary to become debt-free quicker.
- Pay off private loans first
Private loans tend to have higher interest rates. Many times, these rates are variable rates, meaning they may increase in a few years. You want to pay off these private loans before the interest rates increase, adding onto the already large balance, making it difficult to pay the bill.
- Know your options
There may come a time where you suffer a hardship and will need assistance. When you encounter this, call your lender and inform them of your situation. They have options available for borrowers, which includes a temporary forbearance in some instances, which allows you to hold off making payments for a set period of time. You may also want to look into debt consolidation to reduce monthly bills. Further, with the Income-Based Repayment Plan, you only have to make payments up to 15 percent of your pay. To take advantage of these programs, it’s imperative that you communicate with your lenders. They only want to help you. If you don’t keep them updated, you can miss out on options that may be available to you.
Paying off student loan debt may seem like a colossal task, but with proper planning, hard work and sacrifice, you can make it happen. By following these steps and evaluating your finances regularly, you can find ways to cut costs and pay down these bills quicker. In turn, you can gain confidence in knowing that these small steps now will lead to a debt-free future.
Jeffery Sterner writes and blogs about personal financial well-being and issues that influence it for Debt.org, America’s Debt Help Organization.
