Feeling buried under your college debt? Want to put yourself on the path to a quicker exit from student loans? Try this five-day repayment tune-up to go from a feeling of helplessness to one of financial mastery. You’ll be surprised what a difference a week makes.
- Monday: Ask for help
- Tuesday: Review your approach
- Wednesday: Set the finish line
- Thursday: Optimize your monthly payment
- Friday: Consider consolidation and refinancing
If you’ve been all alone in fending off your debt so far, spend Monday thinking about where to find a helping hand. It’s not always wise to ask friends for advice, but there are plenty of free sources of support. More importantly, seek out monetary aid in the form of loan forgiveness or repayment assistance.
- Loan forgiveness: Wipe away all or part of your federal loan balance through government programs.
- Repayment assistance: Receive money to put toward loan payments (even for private student loans) via federal agencies, state governments and even employers.
- Crowdfund payments: Ask for assistance from family and friends, using platforms such as GoFundMe and Gift of College.
Spending Monday asking for help was smart, as any money you receive could factor into your repayment approach, which you should review today. If you decide to pursue Public Service Loan Forgiveness, for example, that would inform which loan repayment plan you select. So once you have an idea of how much help is coming your way, review your approach and adjust it if necessary.
- Repayment plan: Although your private loan repayment is likely fixed, the Department of Education allows you to change your federal loan repayment plan for free at any time.
- Repayment method: If little to no forgiveness is coming your way, you could attack your balance using the debt avalanche or snowball method.
- Repayment frequency: Consider making biweekly payments as a somewhat painless way to pay your loans off faster.
Tuesday charted the course for your student loan repayment, and Wednesday is for writing its happy ending. Marking a debt-free date on the calendar will keep you motivated during the journey. Plus, selecting your repayment time frame doesn’t need to be super complicated.
- When slow-playing your repayment: Sometimes it’s best to go slow. Your debt’s expiration date could be as simple as figuring the day you’re due to receive student loan forgiveness.
- When attacking your repayment: If you’re eager to get free from your loans, set the finish line for your date using a prepayment calculator.
After looking ahead on Wednesday, let’s return to the present. Today, ensure you’ll zero your balance on schedule by making the most of monthly payments. Whether you plan to repay your loans passively or aggressively, this step is key to cutting your interest costs.
- Enroll in autopay: The federal government and most private lenders offer rate reductions in the range of 0.25% to 0.50% for automatically making payments via your bank account.
- Budget (or not) your expenses: With a spreadsheet, software or just some common sense, lower your unnecessary spending and redirect it to your lender.
- Increase your income: Easier said than done, of course, but advancing your career or starting a side hustle are great ways to increase your monthly payment.
Hopefully, your efforts this week will lead to additional savings, a better credit score and peace of mind. Spend Friday considering whether you would benefit from a little simplicity by consolidating or refinancing your debt into a single monthly payment (and maybe lowering your interest rate at the same time).
- Direct Loan Consolidation: Grouping your federal loans could also help you switch loan servicers — but keep in mind that it would reset any progress you’ve made toward eligible forgiveness programs.
- Student Loan Refinancing: Leverage your improved credit (or that of a cosigner) to possibly score a lower interest rate from a bank, credit union or online lender — but be aware that refinancing strips federal loans of their exclusive safeguards.
That wasn’t so bad, was it? Now you have the weekend to rest easy, knowing that your repayment is headed in the right direction.