Caitlin Navratil found herself needing a dose of inspiration, and she found it among Student Loan Hero’s success stories.
“[I saw] people who had significantly more debt than I did pay it off so well and so quickly,” Navratil said. “It made me feel like, well, if they did it [owing] $126,000, then for sure I can do [it] with less than $20,000.”
Find out how this inspired 2016 graduate paid off $14,515 in student loans in just 10 months thanks to the following strategies (and a little bit of help).
Taking out student loans midway through college
Navratil worked hard to secure scholarships that covered her freshman and sophomore years at Bethel University in Minnesota. When her junior year was approaching, however, she was hit with a bombshell.
“I vividly remember being handed like, ‘Here are your loan limits for the year that you are in college,’ and I was like, ‘Loan limits? I don’t even know what I’m taking out here,'” she said. “And so I had a conversation with a financial aid person. I did understand the concept of, ‘OK, I’m taking this out and having to pay it back,’ but the concept of an interest rate just kind of blew my mind.”
Navratil took out the most she could from the federal government — $7,500 in Direct Loans — and borrowed the remaining $7,015 from her parents. Her fear of private lenders had convinced her parents to keep the debt in the family. She also got a much friendlier interest rate that way.
“My parents charged me 3%, but it didn’t start accruing until after I graduated,” she said. “So, a subsidized family loan, if you will.”
Scared to borrow a second time from the government, her parents, or anyone else, Navratil estimates she saved herself an extra $15,000 by dropping her double major as a senior and graduating a semester early.
Finding her repayment mojo
Now that she works for Thrivent Student Resources, Navratil looks back on her college experience and wishes she’d done more to prepare for repayment, such as working a paying internship or part-time job between classes.
Instead, Navratil did what many borrowers do — she waited. In fact, she didn’t spring into action until the end of her six-month grace period, the cushion federal loan servicers are required to give new graduates before their first bill comes due.
“It just was like a time bomb in my mind I knew that was coming,” she said.
Navratil was also spurred on by her getting a job at Thrivent in 2017, at which point she learned about Student Loan Hero’s content and tools.
She added that watching the “Broke, Busted, and Disgusted” documentary, which details the traumatic effects of student loan debt on real-life borrowers, pushed her to be proactive.
“[People] who had so much more debt than me were talking about how crippling it was later in life,” she said. “I think that like wormed its way in my head and heart, that if I keep paying this off over 10 years then I’m not going to get to do other things that I’m hoping and planning to do with my life.”
Settling into a repayment strategy
Plenty motivated, Navratil threw everything she had at her debt. Her entry-level salary and bonus from Thrivent and her side hustle income as an Alpine skiing coach made up the majority of her payments.
What helped her most of all was an assist from her parents. They repaid the original federal loan with their savings. Then they asked their daughter to repay them with a very low, very generous 3.00% interest rate. Call it in-family student loan refinancing.
Navratil also decided to live at home full time, and she’s the first to admit what a “privilege” that was for her.
“I know my friends were living downtown, and there [are] things that I didn’t get to partake in,” she said. “But because I didn’t have a rent payment, all of the money that would be going towards that I put toward my loan every month.”
Initially, Navratil hoped her strategy would zero her debt within three years. But after using our student loan prepayment calculator, she used a downloadable Microsoft Excel spreadsheet that her dad found online to get her on a 10-month payoff schedule. Here’s what that spreadsheet looked like:
Navratil spent those final months attacking the debt like nobody’s business. Her final payment was for $3,735.84.
Developing the right mindset for the repayment journey ahead
You might not be able to mimic Navratil’s exact repayment story. Maybe you borrowed a lot more, have had lesser luck finding your first job, or don’t have parents in a position to help.
But you can adopt Navratil’s mindset — to pay off your debt as quickly as reasonably possible so that you can progress toward your more important financial goals.
Navratil’s best advice is to take advantage of your grace period.
“My biggest regret is not using those six months to start chipping away at it or to not let it compound with interest,” she said. “That would be my piece of advice, to not push it toward the back of your mind.”
Ultimately, Navratil said, you should kick-start your student loan repayment journey as soon as you can on your own terms, not when you’re forced to start paying it back.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 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 3.50% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.49% APR (with Auto Pay) to 7.27% 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 April 17, 2019, 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 04/17/2019. 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 firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 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.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
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.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
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 2.48% effective April 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.49% – 7.27%1||Undergrad & Graduate|
|2.49% – 6.65%3||Undergrad & Graduate|
|2.49% – 7.41%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.49% – 7.11%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|