Monday, April 25, 2016

4 Ways I Paid Off My Student Loan EARLY

I graduated from college in 1998.  I had over $16,000 of student loans.  That probably seems like change to today's graduates, but it seemed a lot to me at the time, especially because I became ill soon after graduating and couldn't hold down a full time job.  I started selling on eBay (this was in the early days and people rolled their eyes even more then than they do now.)

1.  I signed up for automatic checking withdraws.  At that time I got a fraction of a percent off my interest rate.  Every bit helps.  Plus it saved me from having to write a check and mail it.  I figure this is standard in today's world, but at the time it was a bit unique.  So my take away is this:  see if there is anything you can do to get your interest rate lowered even by a fraction of a percent.

2.  I paid more than the minimum each month.  I admit, I only was able to pay $10 extra, but considering my payment was about $140, it was nearly an additional payment each year.  Even if you can't pay much extra, pay what you can in addition to the minimum.

3.  I put any additional money I could towards my student load.  I once won a sweepstakes where the prize was $4,000.  I didn't do anything "fun" with it, and I didn't say I "deserved" anything -- it went straight towards my student loan.  If you are paying attention, that's 25% of my student loan that was paid right there.  I also put all the money from a garage sale towards my student loans.

4. Live as frugally as possible.  I rarely bought anything without a coupon.  It's even easier to do that these days with the apps available.  Be aware what you are spending in small amounts.  It might be a $5 coffee here or a new bottle of nail polish there, but it adds up.  Try to, as often as possible, skip the extras.  I realize when some people face loans of six figures, you do need to do fun things, but think and live frugally.

I realize many people may already be doing these things, but they worked for me.  I love it when someone asks how much I owe in student loans and I can proudly say, "Nothing."  It is hard work, but it's a proud moment when you make the final payment!

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