Up to Your Neck in Student Loans?
3 Ways To Eliminate Student Loan Debt
2016 has had the highest rate of student loan debt for millennials. Being a millennial, I personally know how it feels to be overwhelmed with Student Loans. Here are some tips on how I’ve been chopping down my student loan debt. My ultimate goal is to be debt free, healthy financial habits will help us achieve this goal.
1. Know Your Interest Rate
Everyone should know the interest rate for each loan they have. If you are still in college please start paying your student loan interest early, $50–100 a month can make a world of difference. That is one to two less 30 packs of beer a month you can handle that. If you already graduated college pay off the loans with the high interest rates first. I know my loan holder greatlakes does it for me automatically, which is awesome! Call your bank about that today! Remember, time is the value of money so the longer your interest accrues the more debt you will be facing. Focus on your interest rate, when you are the borrower it is not your friend.
2. Make Payments Often
This is a super easy way to save you money in the long run. Pay your student loan payments weekly. Interest is compounding daily on the loan amount, you want to decrease that amount as much as possible and as often as possible. For example if your student loan payment is $200 a month, pay $50 a week, it is that easy. See personal finance can be simple. I just wish they would have started teaching us this back in high school, excuse the side rant.
3. Pay A Little More
Every time I make a large purchase I always ask myself can I put the same amount on my student loans. An extra $50–100 a month on top of you regular payment can also save you a lot of money in the long run. If that sounds like a lot start with $25. You could try saving $10 a week and add it to your 4th payment at the end of the month. As a millennials I know it can be hard to get in the healthy financial mindset, but just think how rewarding your future will be. Just tell your brain excuses do not live here, make it happen!
Lastly, if you are still in school be very mindful of every student loan you take out. Treat it like a major decision. Ask yourself do I need this extra loan, or do I just want easy borrowed money. Look into grants, scholarships, college/restaurant jobs or paid internships.
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