Paying off Student Loans
Once you’re finished with college, if you have student loans, you will need to pay them back. Fortunately, student loans usually have much lower interest rates than credit cards and other consumer debt.
If you want to pay off your student loans and other debt as soon as possible, you need to come up with a concrete plan. First, if you have any consumer debt such as credit cards or auto loans, you must pay them off first. Pay the minimum on your student loans and then pay off the cards as soon as possible.
Even with low interest rates, you don’t want to hold onto student loans. A low interest rate will still cost you more than no debt at all. Give yourself a time period within which you will pay off your debt. For example, if you have $30,000 a year, you can pay it off within 5 or so years paying about $6,000 a year, depending on the interest rate.
If your student loans seem to be more than you can handle, you need to work even harder to pay it off. If you have student loans, you are probably in or near your 20s. This is when you should be working hard to get your life started financially. If you are living on your own and single, you have even more opportunity to get started.
Work hard at your job. If you have student loans, more than likely you have a degree which should help land you a half-way decent job. Work hard at your job and go above and beyond your tasks. This will help get you more raises in promotions. For extra cash, work overtime whenever the opportunity arises.
If you’re single, you should have extra time. Get a part time job. All the money you make at your part time job, aside from taxes, should go towards paying off debt. Even if you took a year out of your life to work tons of hours, it would be worth it if you could have all your debt paid off.
If you have very little in student loans, probably less than $10,000, you have an even bigger opportunity. You can pay off your loans with the same amount of hard work much quicker, and then get right into saving for a home, retirement, an emergency fund, etc.
If you’re just starting out in the work force and you’re still young, take every opportunity to get an incredible head start!