How to Pay Student Loans Off In a Year
Graduating college with debt can feel like you are carrying all of the textbooks you used on your back. It is completely stressful and feels like such a burden. I'll let you wallow in that stress for three seconds..two..one. Okay, now take a deep breath and repeat after me - "It is going to be okay! I am going to pay my student loan off quicker than I expect."
You might be wondering how you can pay your student loan off in a year or less. I was thinking the same thing. In fact, I thought that I would be making payments on my loan for at least 5+ years. I realized though that I would need to make some sacrifices to pay it off in less than a year and you will too. I graduated in May of 2016, started paying my loan off in October of 2016, and just paid it off at the beginning of August 2017.
As I mentioned above, paying off any debt requires a lot of sacrifice. While people I knew from college were traveling around the world in the summer, I was hitting any and all job boards searching for my first post-grad job. If you are prepared to make some sacrifices, keep reading for some tips on how to pay student loans off in a year.
- Make some payments during college. If you can, try to pay a little bit each semester towards your loan. I believe I made a payment of $2,000 during my freshman year of college. I also made some payments at the end of each year.
- Look for jobs early. Don't be the person that waits until you have graduated college to look for jobs. I started my job search in January of my senior year. While it was very stressful wondering if I would have a job in time to start making my loan payments, I felt better at least making some strides in my search.
- Move back in with your parents. I groaned doing this and wanted to move out a few months after I graduated college. Trust me on this though it isn't fun having to make monthly loan payments, you will want to significantly decrease your debt before moving out. It might be the biggest sacrifice on this list, but you will thank yourself in the future.
- Start making payments during your grace period. Typically, loan providers offer a 6 month grace period from the time you graduate until the time you need to start paying off your loan. This means that no interest will be applied yet. Take advantage of this and start paying anything you can during this time. I started my first post-grad job in August of last year and saved a little bit of money before I made payments towards my loan in October.
- Set up auto-payments to save on interest. Once your loan is out of the grace period, set up auto-payments. This will not only ensure that you pay each month, but it will also reduce your interest. I had my loan set up on a 10 year repayment plan, so my payments were about $215/month.
- Pay more than your auto-payment each month. If you want to pay your loan off quickly, you'll need to put more money towards paying it off each month. While I had my first post-grad job, I paid a couple hundred dollars extra each month. After I had more money saved up, I paid a couple thousand dollars more each month. I thought if it as rent payment.
- Ask yourself if you really need something before buying it. A quick way to "save" some money is to ask yourself if you really need something before you buy it. While it can be nice to have a job and feel as though you can buy anything, remember that you'll want to pay off your loan quicker.
The feeling of paying off your loan is indescribable. It felt as though a weight was lifted off my shoulders. Good luck and don't hesitate to reach out to me if you have any other questions!