When Jen Smith of Saving With Spunk finished her master’s degree in 2012, she walked away with $61,000 in student loans, after interest ballooned her balance. But while her debt exceeded her income, Jen was motivated to pay it off as fast as possible. With an aggressive repayment strategy, she was able to pay off $53,000 of her loans in just one year.
Coming to terms with her debt
Like many people, Jen was overwhelmed and stressed out by her debt.
“My loan balance was more than I made in a year,” says Jen. “I couldn’t see a light at the end of the tunnel. It was hard to be focused because the debt seemed so big.”
But after she got married, her husband convinced her to work towards paying off the debt early. At first, Jen was nervous about the idea. She was afraid to give up her freedom to accelerate debt repayment.
“I didn’t want to live under a rock for five years while we paid off debt. It took me some time to think about it and analyze it. But I realized that paying off the debt faster was the best choice financially for what we wanted to do in the future.”
Creating a plan
Jen was ruthless in coming up with a strategy to pay down her loan balance. She realized that if they stuck with their plan, they could put more than half of their joint income towards debt repayment. In fact, they ended up putting 60 percent of their earnings towards their student loans.
She created a detailed budget, and she and her husband rented a cheap apartment to cut down on living expenses. They cut out extra spending by meal planning and buying used versus new.
“But the number one thing we did was take on as many extra jobs as we could,” says Jen.
Jen’s husband took on a number of odd jobs. Around the holidays, he decorated people’s home with Christmas lights and stuffed newspapers with advertising inserts.
“The first day he was covered with paper cuts, so he went back on day two with gloves,” says Jen.
Jen is a full-time acupuncturist, but she was contacted by a rehabilitation facility to provide her services two days a week at $75 an hour. That turned into an extra $600 a month they could put towards their debt.
Jen’s favorite side gig was babysitting at a group home for foster children. She assisted the house parent and took the kids out for excursions. This side gig provided extra income, but it also fueled their desire to adopt foster children and kept them motivated.
Staying the course
To help keep themselves focused on debt repayment, the couple got creative. They became mystery shoppers, so they could eat out or try out local events and get reimbursed for whatever they spent.
“It wasn’t a source of income, but it provided free dates,” says Jen.
And as a visual person, Jen needed something she could see every day to remind her of her goals. She created a giant thermometer that they put by the thermostat. They would color it in whenever they made a payment, to show how much progress they made.
Their hard work paid off; in just one year, they paid off $53,000 of debt.
With her debt nearly gone, Jen expects her loans to be paid off this year. That will free up money for her other goals, such as traveling internationally and buying a home.
“We want to buy a fixer-upper. I like the idea of doing the repairs ourselves and creating the home we want.”
With that new home, Jen hopes to one day adopt children in the foster care system. The house she plans to buy will have space for her to provide a home and family for kids.
Paying off student loans
Jen knows what it’s like to feel like you’re drowning in debt, but she urges people to tackle the problem head on.
“When you’re starting out, it feels like you’re facing a huge dam. You can’t see the effect of your efforts just yet,” says Jen. “But if you stick with it, the dam will eventually crack and your hard work will snowball on itself. Keep plugging away – every little bit helps. Then you’ll look back and realize just how much you accomplished.”
By putting extra money towards your loans, you can take off years from your repayment period and save yourself hundreds or even thousands in interest payments. Putting just an extra $10 or $25 a month can make a big difference over time.
To find out how putting even small amounts towards your loans can help you pay off your loans early and save money, check out our prepayment calculator.
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% – 6.28%3||Undergrad & Graduate|
|1.89% – 6.77%4||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|1.99% – 5.61%5||Undergrad & Graduate|
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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 Sep 1, 2020 and may increase after consummation.