There are a few proven rules of thumb to follow when it comes to financial health. One is to try …
There are a few proven rules of thumb to follow when it comes to financial health. One is to try to pay student loan debt as fast as your budget allows.
Getting ahead quickly when paying off student loans is a smart move that prepares you for overall financial well-being. Paying off or even just reducing student debt improves your debt-to-income ratio, which is essential for a healthy credit history and credit score.
Your wallet will thank you too. When you make that last payment earlier than expected, you pay less interest over the life of your debt, saving you money on the overall cost of loans.
There are many reimbursement options for federal student loan borrowers, but these might not be right for everyone. Before speeding up student loan repayments, it’s essential to remember that prepayment only makes sense once you’ve built a solid financial foundation, such as building emergency savings. and managing other debts such as high interest credit cards.
[Read: How Volunteer Work Can Pay Your Student Loans]
With that in mind, here are some of the more creative ways borrowers have reduced or paid off student loans ahead of schedule:
– Watch for deals.
– Think outside of the salary.
– Play the change.
– Find five.
– Stay in the know.
Watch for deals
Have you recently discovered funds you didn’t think you had, like a forgotten savings account, cash rewards from a consumer credit card, or even a discount from a recent purchase? Have you recently received a raise? If you are lucky, apply those funds directly to your student loan debt before you are tempted to use the “found” dollars for anything else.
In the long run, applying these types of exceptional benefits to your student loans will save you hundreds, if not thousands of dollars in interest when you use those funds to pay off your student loans.
Think outside the paycheck
Some borrowers start a lateral restlessness to help repay student loans. Additional creative ways to supplement your 9 to 5 salary include signing up for User Research Online. Many websites offer an allowance for people to help them test products or websites, take surveys, and more.
[READ: How to Pay Off Multiple Student Loans.]
You can also explore flea markets and yard sales, buy great items at low prices and resell them on Facebook Marketplace, eBay, or other platforms. Make sure you price each item for a healthy ROI, and set aside the extra income each month for an extra student loan payment.
You might as well have fun when it comes to paying off student loans.
Organize monthly challenges to save money with your family or friends. See who can be left in charge of a “no-restaurant challenge” where you cook at home or bring a lunch bag to work for a week. Cut out other ‘nice’ monthly purchases like fine coffees or impulse online shopping and see who can stick to the goals. Use the savings to make a additional student loan payment, and watch those loan balances go down.
One of the most creative strategies is to save $ 5 per month. Keep them in a jar or envelope, and at the end of each month, deposit them into a bank account, where they are then used to make an additional student loan payment. By consistently following this simple rule, it is possible to save a few years out of a typical 20-year repayment term – and save hundreds or thousands of dollars in interest.
Stay up to date
The concert economy is constantly evolving. New opportunities to earn extra money appear regularly. For example, longtime DoorDash player still offers a way to make some extra cash as a part-time delivery guy.
[Read: How Second Stimulus Bill Affects Employer Student Loan Repayment Benefit]
It can also pay off to discover new opportunities. For example, Gopuff is a recent entry into the odd-job economy located in both metro and college areas. The company pays part-time drivers to deliver food and drink, as well as consumer goods housed at Gopuff’s local distribution centers. Work when you want and save extra money to speed up student loan repayment.
As you explore ways to eliminate your student loans faster, remember that your financial situation is specific to your current situation. For some borrowers, prepaying student loans can save money, reduce stress, and improve overall financial health. Consider these tips and your finances to figure out which option is best for you.
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5 Creative Ways To Reduce Your Student Loan Debt originally appeared on usnews.com