Combining finances as a couple can more than double the amount of student debt you’re facing. However, when you’re working toward paying off student loans, two wallets are better than one.
Couples can eliminate student debt together as they find ways to pay it off smarter and faster. By working with your significant other and planning carefully, couples can find themselves in an advantageous position to tackle their student debt.
Setting financial goals as a couple
Before you start tackling your student loans, you and your partner will need to do some work to get on the same page. Couples need to align their priorities and efforts, or they could end up working against each other — and their shared financial goals.
Be honest and own up
First, couples need to be honest about where they are and how they got there. Together, catalog your financials: debts, incomes, bills, savings, and everything else.
If there are money issues you feel are holding you back, now might be a good time to discuss them.
Try to avoid getting defensive, and don’t hide anything. Instead, be willing to admit where you could do better and take responsibility for improving your own money behavior.
Focus on fixing, not rehashing, the problem
Stay focused on the future and what you can do next, rather than what you should have done in the past.
Instead of getting hung up on which student loan belongs to whom or feeling resentful that your partner brought student debt into the relationship, drop the blame game and take joint ownership of student loans.
Partners should also be honest but understanding of each other, and avoid judgment or shaming. This kind of reaction often just makes a partner more likely to be deceitful, finds a 2014 survey.
This process is about fixing problems and finding solutions, not doling out punishments for past mistakes.
Align your money priorities
Discuss each of your financial priorities and values. What do you want your finances to look like in six months? A year? Five years? What is a “must-have” for each of you, and where are you willing to compromise?
If you each share what you hope to achieve, you can discuss the importance of each goal and decide what to start working on first.
Strategies for couples to knock out student debt
One of your top goals as a couple is probably to pay down student loans, particularly if they carry higher interest rates. It’s challenging for a couple to build wealth with student debts and accruing interest to fight against each month.
If you both buy in to knocking out debt, you can get a lot closer to this goal together than you would apart.
If you’re going to share financial goals, you should also consider fully combining your finances as well. A joint, dedicated effort to pay down debts works best when no one’s holding back.
When you have two people’s savings, incomes, and brainpower to work with, you suddenly have a lot more resources to budget with. Throw as much as you can at student debt and you’ll be amazed at how fast you can pay it down — together.
Make a plan to smash student loans
Part of pooling resources is deciding how to spend all those dollars. Couples will need to make a “get out of debt plan.”
Start with the big picture: How fast can we pay down debt? How much can we pay each month?
Decide which student debts to pay off first (focus on loans with high interest). Make a spending plan to put extra money toward your student loan. Look into options like refinancing, repayment plans, or other debt management tools.
As a team, you can outline your roadmap to financial freedom.
Keep each other on course
It’s healthy to have a mechanism in place to check your money decisions. Couples have a very effective, external check on their spending: their spouse.
Knowing that you’ll have to justify your financial choices will give you a moment to step back and rethink a purchase. Getting in this habit can also prevent fights and spending disagreements.
Play to each partner’s strengths
Each couple will have to decide the details about how they want to manage their finances.
But they can play to each partner’s strengths to get further, faster. Working together also allows partners to compensate for the other’s financial blind spots and avoid mistakes.
Establish more income sources
When two people work together, there’s double the income. If each partner works on a side job too, it’s possible to quadruple your income sources. This additional income can be used to pay balances down on student debt.
Look into setting up a low-investment side job to start bringing in more money. You can also use unique skills to ramp up a side job that pays well.
Couples can support each other in these endeavors by taking turns covering other household chores or responsibilities. This will free up time so a partner can focus on working and earning more.
Encourage and motivate each other
As you take steps toward paying off your student loans, point out the progress you’re making. Even simply saying, “Look — another $500 is gone!” can be encouraging. If you see your partner stepping up to the challenge, let them know it’s noticed and appreciated.
For even bigger wins, like a promotion at work or getting rid of a high-interest loan, treat yourselves to a fun date night.
Seeing that your efforts are paying off will encourage you both to keep working toward goals.
Paying down student loans as a couple comes with a built-in reward system. Knowing you’re doing something that benefits your partner is a powerful and positive source of motivation. When you face student loans together, those debts won’t stand a chance.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.99% – 5.64%1||Undergrad & Graduate|
|1.89% – 5.90%2||Undergrad & Graduate|
|2.25% – 6.09%3||Undergrad & Graduate|
|1.89% – 6.77%4||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|1.99% – 5.41%5||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews! |
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.79% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.64% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of July 31, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 7/31/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of September 9, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of September 10, 2020.
5 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.16% effective August 10, 2020.