If paying off your student loans feels way too far away—or even worse, totally impossible—hear me out. You can do this.
If you borrowed money to pay for school, your first question might be how to pay off your student loans without stress. The short answer is that there’s no magic bullet, but there are definitely measures you can put in place to make paying back student loans easier.
what is a student loan?
A student loan is a type of loan designed to help students pay for education costs such as tuition, books, supplies, and living expenses. If you apply for a student loan, your school will likely include student loans as part of your financial aid package. It is important to understand what types of loans you are offered. Generally, there are two types of student loans: (a) Federal and (b) Private student loans.
How to Pay Off Student Loans without stress
1. Get a working budget.
This one is a game-changer. If you are not already doing this, now is the time to make a budget and stick to it. A zero-based monthly budget will show you exactly where your money is going and where you can cut back. I call it a working budget because you should be able to adhere to and follow it strictly. Having a budget for the payment of student loans is not enough. It will be your 100% duty to follow it and make sure you obey all your plans.
2. Pay more than the minimum payment.
You have probably heard this one before. If you are only paying the minimum payment each month, you are not getting anywhere fast. You might not even be breaking even with the interest you are piling up. By making larger payments, you will be able to attack the amount you owe at a quicker rate. Start playing around with that Student Loan Payoff Calculator to figure out how fast you can pay off your loans by making extra payments. For instance, if you are to pay $120 at the end of each month, you can target and pay around $150 monthly. This will aid you in paying off your student loan faster.
3. Take advantage of tax deductions
The federal government offers a student loan interest deduction on your taxes for interest paid during the year on qualified loans. The law allows you to deduct up to $2,500, depending on your adjusted gross income. The deduction is available for both federal and private student loans.
You can claim this tax deduction if you’re legally required to pay interest on a qualified student loan and your filing status is not married filing separately. There are also adjusted gross income limits for this program, which are set annually. You do not need to itemize to claim this deduction.
4. Make some financial sacrifices.
Remember when I brought up sacrifice earlier? Like saying no to late-night fast food? Here’s where it comes into play.
Look at your lifestyle. What extra stuff have you been living with that you can do without? Bye-bye, cable package. Are you the type that spends much on pizzas and unnecessary shopping? See you, bougie subscription boxes. Maybe cut your housing cost in half by finding a roommate. Do you have a guest room that is not getting much use these days? Rent that sucker out! Just think how quickly you could pay off your loans if your housing costs were cut way down.
5. Get a side hustle
If your biggest problem is income, pick up a part-time job on the nights or weekends so you can get some cash quickly. Then toss that extra cash directly at your student loan payment. There are a ton of side hustle options out there—everything from driving an Uber and delivering food to walking snow clearing. When I was paying off my student loans, I drove for Lyft and Uber and did freelance marketing work to pay those bad boys off even faster. I also made some extra income from writing news articles like this.
Remember, the extra job will not last forever. You are just trying to get intense and kick that student loan debt out of your life so you can move on with your life.