• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Money Management
    • Debt Reduction
    • Credit
    • Mortgages
    • Mutual Funds
    • Tax Strategies
    • Loans
  • Budgets
    • Saving Money
    • Income
  • Banking
    • Checking Accounts
    • Check Writing
    • Fraud
    • History
  • Entrepreneurs
    • Entrepreneur Interviews
    • Money Making Ideas
    • 3D Printing
  • Resources
  • Retirement
  • About
    • Privacy Policy

Personal Finance Blog

Tips And Stories To Help You With Managing Money

  • Privacy Policy
  • Saving Money In 2018
You are here: Home / Budgets / Pay Off Student Loans Faster

Pay Off Student Loans Faster

October 31, 2017 By Twila VanLeer

Student Loans
“Review recent reporting on student loans, and chances are that stories of eight million people in default and retirees paying off loans with Social Security will come up.” Forbes Magazine
One of the main reasons Millennials don’t invest more money toward retirement is that they are saddled with education debt. The average amount of student loans in 2016 was a record $37,172. That’s a 6.05 increase over the previous year, according to Cappex.com, a college scholarship website.

Bankrate.com studied the issue and came up with these suggestions to help those with student debt to get out from under the load faster:

Treat the loan as you would a mortgage, making larger payments to reduce the principal faster. A student loan of $25,000 with 6.8 percent interest and a 10-year payback period would cost $288 a month. Upping the payment to $700 per month would clear off the debt in three years.

Make payments twice a month instead of monthly. That would help even out an increased payment. After the initial push to get the loan paid, the money that had been absorbed in student debt then becomes available for other things, including a mortgage and savings toward retirement. Or it could be used to help a child through college, saving him or her the same burden of student debt.

Many experts advise those with student loans to create a plan for paying off in three to five years. Seeing the plan in black and white gives a better sense that this is something that can end. It becomes the basis for a goal that the individual can commit to.

The example is a couple who have $50,000 in combined student debt. They earned about $100,000 a year jointly. They established a budget and cut back on spending. They had bonuses from their jobs that they dedicated to the drive to become debt-free and they put $800 per month into the loan payment. They had paid off the loans in two years where it would have taken eight years if they had made only minimum payments.

Having money put into savings automatically bysteps the temptation to spend everything you earn. Don’t use checking and/or savings accounts you already have. Keep a separate account for the purpose of student debt reduction.

Minimizing the amount of loan assistance you need to complete college by working part-time is a counter step to be considered at the outset. Planning ahead, being willing to sacrifice to keep loans at the lowest possible figure and keeping focused on long-range personal finances will help. Falling off the budgetary wagon when personal wants and desires get first attention will lead to future problems.

The very best advice: live within your means and be conscientious about saving.

Filed Under: Budgets, Personal Finance, Student Loans

About Twila VanLeer

Journalist/writer for more than 50 years. Pulitzer Prize nominee, 1983 for coverage of the first permanent artificial heart. More than 50 national, regional, local awards for news writing. Main writer for a memorial book for Deseret News' 150 th anniversary and for a book recounting the 1997 re-enactment of the pioneer trek from Omaha to Salt Lake City. Co-writer and editor of "True Valor," a book on the history of the artificial heart. Author of the book, Life Is Just A Bowl Of Kumquats, a wonderful story of a house wife and her trials with raising a large family.

Primary Sidebar

Personal Finance Articles

  • Make Saving A Priority
  • Review Your Home-Insurance Risks
  • Lowest Air Fare? Try August 28
  • Hackers Targeting Bitcoins
  • Keep Your Emergency Fund Intact

Save On Amazon

Search

Personal Finance Education

Investing Education from Morningstar.

As Seen On Intuit

Intuit.com has ranked Coolchecks.net #4 out of 10 of the best blogs to help you save money. We hope to help you become more aware of your own financial situation and strive to improve it.

Featured On Mint.com – July 2014

Mint Interview

Best of Personal Finance Blogs

Best of BuyerZone Business Finance Blog Recipient

Personal Finance Sites We Recommend

Get personal finance advice from the people behind the top money blogs, including Wise Bread, The Simple Dollar, Mint and Nerd Wallet.

[footer_backtotop]

Copyright © 2021 2018 ·Metro Pro · Genesis Framework by StudioPress · WordPress · Log in