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% – 6.65%1||Undergrad & Graduate|
|1.99% – 7.10%2||Undergrad & Graduate|
|2.99% – 6.44%3||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|1.99% – 6.43%4||Undergrad & Graduate|
|3.18% – 6.07%5||Undergrad & Graduate|
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1 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 June 23, 2020. Information and rates are subject to change without notice.
2 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Splash Financial loans are available through arrangements with lending partners. Your loan application will be submitted to the lending partner and be evaluated at their sole discretion. For loans where a credit union is the lender, or a purchaser of the loan, in order to refinance your loans, you will need to become a credit union member.
The Splash Student Loan Refinance Program is not offered or endorsed by any college or university. Neither Splash Financial nor the lending partner are affiliated with or endorse any college or university listed on this website.
You should review the benefits of your federal student loan; it may offer specific benefits that a private refinance/consolidation loan may not offer. If you work in the public sector, are in the military or taking advantage of a federal department of relief program, such as income based repayment or public service forgiveness, you may not want to refinance, as these benefits do not transfer to private refinance/consolidation loans.
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 May 1, 2020.
Fixed APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rate options range from 2.88% (without autopay) to 7.27% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Rates are subject to change without notice. Fixed rate options without an autopay discount consist of a range from 2.88% per year to 6.21% per year for a 5-year term, 3.40% per year to 6.25% per year for a 7-year term, 3.45% to 5.08% for a 8-year term, 3.89% per year to 6.65% per year for a 10-year term, 4.18% per year to 5.11% per year for a 12-year term, 4.20% per year to 7.05% per year for a 15-year term, or 4.51% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan).
Variable APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Variable rate options range from 1.99% (with autopay) to 7.10% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Our lowest rate option is shown with a 0.25% autopay discount. Our highest rate option does not include an autopay discount. The variable rates are based on the Variable rate index, is based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 27, 2020, the one-month LIBOR rate is 0.43763%. The interest rate on a variable rate loan is comprised of an index and margin added together. The margin is a fixed amount (disclosed at the time of your loan application) added each month to the index to determine the next month’s variable rate. Variable rate options without an autopay discount consist of a range from 2.01% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 2.09% per year to 3.92% per year for a 8-year term, 4.25% per year to 6.40% per year for a 10-year term, 2.67% per year to 4.56% per year for a 12-year term, 3.44% per year to 6.65% per year for a 15-year term, 4.75% per year to 6.93% per year for a 20-year term, or 5.14% per year to 7.10% for a 25-year term, with no origination fees. APR is subject to increase after consummation. Variable interest rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. The maximum variable rate may be between 9.00% and 16.00%, depending on loan term. The floor rate may be between 0.54% and 4.21%, depending on loan term. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
3 Important Disclosures for SoFi.
4 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 3.19% APR (with Auto Pay) to 6.43% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 6.43% 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 June 15, 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 6/15/2020. 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.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). 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 0.19% effective June 10, 2020.