4 Solutions for How to Pay Off Student Loans Little by Little
February 19, 2020
The journey towards being free from your student loans can be frustrating. Luckily, there are steps you can take to lessen this burden. While debt payoff can sometimes feel isolating, student debt is an occurrence that’s affecting students worldwide. The Institute for College Access & Success notes the average student loan debt affects 66% of Illinois graduates and this number continues to rise nationwide.
Student debt can feel daunting so it’s important to make sure you’re as equipped as possible to tackle your debt and make the best decisions for yourself as you make payments.
Let’s talk strategy
One method some graduates find more palatable is paying off their debts little by little. In doing this, your debt becomes less of a looming figure. With more than half of graduates seeing no change in the size of their debt balance, choosing a payment plan, be it moderate in pace, paying in large sums, or smaller amounts that are consistent, could help you see a difference in your standing balance.
Here are four solutions you might consider:
- Student Loan Forgiveness (SLF) — SLF is a system designed for people to pay off, forgive, cancel or discharge their Federal Student Loan. Certain restrictions apply to these programs. For example, to repay federal student loans through SLF, graduates must work a job that’s giving back through public service. If your professional goals align with a career path that involves public service, consider looking into SLF.
- Lump-Sum Payment — It sounds tempting to use your bonus or tax refunds to go on a holiday or upgrade your phone to the newest model. However, if you used a portion or the entirety of your bonus to pay for your student loan instead, you could minimize the balance of your loans even further. Consider taking the lump-sums that you’re awarded with annual regularity and using that to contribute to your loan repayment.
- Make extra payments — This strategy can play out in more than one way. You can either pay more than once each month or pay your minimum and continue shuttling funds to your loans. Both options involve making payments that extend beyond the required monthly payments to your loan. This strategy is also a great opportunity to maximize your payments if you’re doing well with your budget and have money left over after your financial obligations and savings are fulfilled.
- Pick up a side hustle — Turning your interest or hobby into a business doesn’t need to be a dream. While it may or may not cover your total living costs, having a side hustle certainly can help you ease debt pressure by making extra income while doing what you love. For more tips and tricks concerning side hustles, take a look at our 8 Side Hustles for Extra Money blog post!
Paying down your debt should be an empowering process and, sometimes, figuring out the best way to do so involves hiring a professional to take your lifestyle and financial goals into account. As you embark on your debt reduction journey, it’s important to make choices that won’t affect your quality of life negatively. You can pay down your debt and enjoy life, too! As we always say, the best choices are the ones that work best for you.
Looking for more debt pay-down strategies for your student loans?
We’ve got you covered. Take your debt payment to the next level with our tips on How to Deal With Your Student Debt Head On.
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