It seemed like a good idea at the time, right? Getting a few student loans to make it simple to focus on college without having to worry about funding it with your already thin paycheck. But now you’re looking at graduation, or maybe you have already turned your tassel, and that loan balance is weighing heavy on your mind. It certainly can be a daunting situation, but it doesn’t have to be completely overwhelming.
The first thing you need is a plan, which is probably what brought you here. You’re intelligent, so you’re likely searching for some of the best ways to deal with what seems like a mountain of student debt. Don’t worry, we’ve got you. Here are some of the most effective ways to handle and pare down student debt:
1. Keep The College Lifestyle
You just left what was in all likelihood one of the most frugal lifestyles that you have lived thus far. Why stop now? Many people learn to get by with so little in college, and when you leave school that can repay dividends.
While others are splurging on meal services and subscription boxes, you can still be eating on a tight budget and putting the extra money into your debt payments. Living like a pauper for a few years means you could be debt-free a lot sooner than many of your peers.
2. Follow The Snowball
The snowball method of debt payment is a popular technique, and for good reason, it works well. First, you list all of your existing debts, from small to large. Every type of loan you have.
Maintain all minimum payments, and focus all additional liquidity on the smallest debt. When that one is done, move to the next smallest, and so on. Each time, gathering up the minimum payment from the previous debt and rolling it into the current one.
3. Push Your Extras Right Into That Debt
This one’s simple. Did you get a bonus? Debt payment. Raise? Debt payments. Any other non-essential liquidity? DEBT. PAYMENTS.
4. Sharpen A Side Hustle To Cut Your Debt Fast
If you can work up a profitable side hustle you can shrink your debt must faster than with your single income. Additionally, if you can create income streams from streaming, Patreon, or other paid content sites, you may be able to become debt-free incredibly fast, followed closely by being financially independent.
5. Refinance Only If It Makes Financial Sense
This is something you should only consider if the interest rate variance makes the process truly worth it. Sometimes people are much too eager, and they run right to an unscrupulous lender, or even a lender who simply doesn’t care if it’s the right move for the consumer.
Make sure the result is going to be an improvement on what your loan terms and payments are currently. The last thing you want to do is refinance, only to find out your payment is now much higher than before and you cannot meet it.