Debt is intimidating. It’s even more intimidating knowing you have thousands of dollars tied up in student loans. You’re probably asking yourself, “How am I going to pay off $40,000?” It’s scary, and at times, seems impossible.
It doesn’t have to be that way. It will take time and requires patience and dedication. So for those of you wanting to pay off your loans as fast as possible, here are some ideas to achieve that goal.
Make reasonable payments
It’s important to remember to make payments that you can afford. If it’s feasible for you to make large payments (think the amount of your monthly rent payment or even larger), do it. It will help you pay off the loan faster and pay less interest in the long run. The alternative, however, is making payments that make sense to you and keeping up with it every month.
Have a goal in mind
How long do you want to make payments? 10 years? 15 years? Never is probably your answer. A good first step is to give yourself a goal. Maybe you want to pay off your loans in five years. To do that you might have to cut back on larger expenses for a few years and agree to treat yourself to a nice vacation as a reward for paying off your loans. You might even consider taking any bonus checks from work or tax refunds and putting those directly towards paying off your loans more quickly.
Set up a loan account
Create a savings account dedicated specifically to loan repayment. Once you have that in place you can set up automatic transfers so that every paycheck (or even once a month) a certain amount of money is transferred to that account to get a head start on the loan repayment process.
When’s the best time to start saving? Now. Even if you choose to defer your payments, there’s no reason why you can’t start saving to pay off your loans while still in school. Make a goal of saving a $1,000 or more to make a large initial payment on your loans. When it comes down to it, any dollar amount you can save is better than nothing!