How to wipe out student loan debt – this is one of the most frequently asked questions by students who are into student loan debts. And in this post, I will be sharing with you some of the ways that have worked for people in clearing off their student loan debts whether it is federal or private.
How to Wipe Out Student Loan Debt
There are many ways through which one can wipe off their slate clean when it comes to student loans. But I must warn you, before you embark on the journey of clearing off your student loan debt, you should be prepared. The journey is not entirely smooth. There are lots of hiccups on the way and you should be ready for all of it. But most importantly, you must be determined and disciplined if really you want to clear off your student loan debts. With that being said, follow the steps below to kick-start your journey.
Pay Off Your Student Loans with Debt Snowball
The debt snowball method as you should know has helped many people dump their debt, and it can also work for student loans too. First of all, you should make a list of all your loan debts from the smallest balance to the biggest. You should start paying on the smallest student loan balance first. And then throw any extra money that you have into paying off that first debt all while still paying the minimum on every other thing.
And once you have paid off the first debt, you should move to the second-smallest balance. Take everything that you were putting toward the first one and then add it to the minimum of the second balance in the list. And once that debt is finally paid, you should move on to the next one and then repeat the process until you are finally out of debt.
You might just be thinking that maybe this is going to be taking forever! Well, you should not get it twisted. Many people that go all in on this very plan pay off their debt in just 18 to 24 months! And that’s not quite forever, is it? My favorite thing about this debt snowball method is that you will feel like the progress that you are making as each student loan gets to disappear. Knocking off those smaller loans in question out first will give you a couple of quick wins and then help you stay motivated to crush the bigger student loans very fast!
You should just make sure that you don’t pocket the extra payment money as you get to pay off each loan. You should keep the momentum going simply by rolling that very money into the next loan payment.
Apply Every Raise As Well As Tax Refund towards Paying Off Your Student Loans
What do most people do when they finally get a raise at their workplace? They quickly blow through it like it’s nothing in the first place. And then they get to wonder why it felt like they didn’t even get a raise.
One thing you should know is that as you keep growing in your career and getting promotions as you go, you should put your extra income toward paying off those student loans. You should not move to a bigger house. Don’t even buy a new car. Don’t buy any of those designer threads. And don’t get to upgrading your smartphone. You were living well and fine without that extra money before, and you can well keep living without it a little while longer. Now is not the right time to upgrade your lifestyle. You can do all of that at a later time when you don’t have a payment in the world! Use your income right now to boost and make major progress in your fight against student loan debt.
Increase Your Income with a Side Hustle
If it is that your biggest problem is income, then you should pick up a part-time job on the nights or weekends just so you can stack cash quickly. Then gear that extra cash directly at your student loan debt! There are a host of side hustle options out there which include driving an Uber and delivering food to walking dogs as well as house-sitting.
You should remember that the extra job won’t last forever. You are just trying to get intense and then kick that student loan debt out of your life just so that you can move on with your life.
Don’t Rely On Student Loan Forgiveness
I know people already told you that taking out student loans was no big deal just because you could just get them forgiven later.
But student loan forgiveness as you should know is not really the dream come true as it sounds like. First off, with the present program, there are so many requirements that you have to meet in order to qualify such as working in a public service job for 10 years. And even at that, forgiveness is not fully guaranteed.
And right now, there has been a lot more talk lately about the government wiping out student loan debt across the board. Quite true, that would be awesome, but you really should not bank on it. I mean, Biden talked a lot about that sweet student loan forgiveness and so far, he has canceled nearly $3 billion of current student loans. That may really sound like a lot until you hear that the current federal student loan debt sits at $1.57 trillion and that is as of the summer of 2021. So after all that talk, just 0.19% of the debt was only forgiven.
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