7 Proven Ways to Stick to Your Debt Repayment Goals

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Only eight percent of those who set New Year’s resolutions actually achieve them.

Why do so many people fail, and how can you improve your chances for success?

If your goals have to do with debt repayment, they’re not just nice to achieve — they’re crucial to your long-term financial prosperity. Here are seven proven ways to reach your money goals this year.

1. Know where you currently stand.

Before you can set a specific goal (see step 2), you need to know where you currently stand. In the case of debt, you may be feeling overwhelmed both by the amount you need to pay each month and/or by the sheer number of due dates, if you have multiple debts.

While that feeling may inspire a goal or resolution, it’s actually just the first step in how to achieve goals.

If you’d like to reduce your debt, step one has got to be to know exactly what you owe. Make a spreadsheet with all the relevant information, including type of debt (student loan? car payment? credit card?), total balance, interest rate, minimum monthly payment, and the due date of that payment. This will prepare you to actually set your goal.

2. Make your goals explicit and specific.

Now that you’ve got a grip on your situation, you’re ready to set your goal.

Which debt will you set your sights on and why? You might go for the debt avalanche method and focus your efforts on the debt with the highest interest rate. Alternatively, perhaps your car payment takes the biggest chunk out of your budget each month, and paying it off would give you the greatest flexibility as you continue your journey to reach your financial goals.

Assuming you’ve got student loan debt in your crosshairs, your goal might be to pursue a Direct Loan Consolidation for your federal loans, or maybe refinance with a private lender at a lower interest rate.

Goals like these can help you better track payments or ensure that more of your money goes to principal rather than interest (gotta beat amortization back!).  Being specific about what you want to achieve makes you 10 times more likely to achieve your goal than someone who has only a vague sense of what they’d like to do.

3. Strike a balance between ambition and achievability.

When you’re deciding on what specific financial goals you want to reach, it’s important to strike a balance between a goal that is lofty enough to require some willpower and sacrifice (after all, if it were easy you would have done it already), but is not so pie-in-the-sky that there’s no chance you will achieve it.

Ideally, you want to be motivated by the challenge, not terrified and overwhelmed by it.

Perhaps that’s why only 46 percent of those who set goals last beyond month six — if it’s clear that you’re not going to succeed, why even try?

One way to walk the line between ambition and achievability is to look at what you were getting accomplished and trying to improve on that by, say, 10 percent. For example, if you were putting $500 per month toward debt last year, can you swing $550 this year? When it comes to how to achieve goals, that’s as simple as canceling cable or dining out two or three fewer times per month.

4. Write down your goals.

According to a study by Gail Matthews, a professor of psychology at Dominican University in California, individuals were significantly more likely to achieve their goals if they wrote them down as opposed to simply thinking about them. So making a list of financial goals may actually lead to checking it twice — and succeeding.

Post your list if goals where you can see it every day. Try printing it out and posting it by your bathroom mirror, using your list of goals as your cell phone or computer wallpaper, or incorporating a goal into a password you use often can keep it at the forefront of your mind.

5. Hold yourself accountable by sharing your goals with others.

Matthews’ study also found that sharing goals with others further increased the likelihood of success. And with social media as ubiquitous as it is, sharing is easier now than ever before.

Tweet your goals or post them on Facebook. However, while sharing your financial goals far and wide can feel satisfying, Matthews’ research actually had a group of participants sharing their goals with friends on an individual level.

Further, sharing goals a single time wasn’t as effective as sharing goals with a friend or family member up front and then committing to making regular updates on progress. So buddy up with someone — not only to share your debt-reduction goals, but to email or post on each other’s social media accounts every so often to let them know how you are doing.

6. Break your goal up into manageable chunks.

Of the five groups in Matthews’ research, the one that experienced the highest rate of success was the one that not only wrote down goals and shared them with others, but also formulated action commitments.

If you really want to succeed this year, break down your financial goals into smaller components you can check off your list as you achieve them.

For example, if you have a debt-related goal, maybe in January you construct the spreadsheet mentioned above and identify loans you want to refinance. Then in February, you pull your credit reports and identify any steps you need to take to improve your credit so that you can qualify for the best interest rates.

In March, you can actually apply and update your spreadsheet in April with your new payment amounts and interest rates to decide where you want to focus your efforts in May, and so on.

Your goal may be different, but if you can break it up like that, each month feels more doable and less nebulous.

7. Build in incentives and rewards.

Obviously, paying off a debt has inherent rewards — flexibility in your monthly budget, improved credit score, etc. However, you may find that you’re more willing to make sacrifices if you establish a meaningful reward. What that reward is may be different for different people, so think about what makes you happiest.

Also, remember that rewarding yourself for reaching your money goals doesn’t have to involve spending!

Let’s say you freelance to make extra student loan payments. Maybe once you pay off a particular account, you take a month off to binge-watch your favorite shows in your spare time instead of working so much. Or perhaps a splurge is in order — just make sure it’s a one-time item or experience that doesn’t break the bank.

Everyone’s situation is different, so everyone’s financial goals and the steps necessary to reach them will be different, too.

However, the strategies for success when it comes to how to accomplish goals have been researched and quantified. So if it’s time for you to get serious about your debt, try one or more proven methods for sticking to your goals.

Interested in refinancing student loans?

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1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

3 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, 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 August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and 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 cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. 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. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.