A few weeks ago, I did something I’ve been dreaming of for years but hardly thought was possible: I made my very last payment on my student loans.
After seeing the balance at zero, I was hit with a flood of emotions — relief, joy, and disbelief.
My journey into student loan debt started innocently enough at age 17 when I headed to college. Loans were my only option to pay for school, so I signed up without flinching, not truly knowing what I was getting into.
I graduated with my B.A. and had $23,000 in student loans. Over the next few years, I paid the minimum. Then I decided to go to graduate school.
I knew more about student loans this second time around, but I still ended up going to graduate school at my dream school and taking on an additional $58,000, making the total amount borrowed $81,000.
How to Pay Off Student Loan in 5 Years
When I graduated in May 2011, after paying the minimum on my loans for five years, I had $68,000 left. In December 2015, I made my very last payment. Here’s how I did it.
I Moved to a Cheaper Location
I went to graduate school in New York City and absolutely loved it. But when I graduated, I couldn’t find consistent work. After six months of giving it my all, I realized I couldn’t afford my rent in NYC and make sufficient payments on my student loans.
I could have opted for an income-driven plan, but I considered it a last resort since I knew interest would keep accruing. At the time, my loans were already generating $11 in interest per day — and it made me sick.
So I ended up moving to Portland, Oregon to be reunited with my partner (after doing long-distance for nearly two years, which also isn’t cheap) and lower my rent. In fact, I cut my rent in half.
I Side Hustled Like Crazy
Portland proved to be more affordable in a lot of ways, but wasn’t great for my employment situation. I continued to struggle, making $10 to $12 per hour for a year and a half.
I could pay my bills, but was dipping into my savings to continue to put more towards my debt. I knew I didn’t want to completely wipe out my savings, so I began to side hustle every chance I got.
Over the past four and a half years, I have:
- Sold water at a rave
- Participated in a medical study
- Worked as a coat checker for a party
- Worked as a brand ambassador (which increased my income by $5,000 per year with a few gigs per month)
- Worked as a housecleaner
- Worked as a pet sitter
- Worked as a registration assistant for a race
Since I didn’t have full-time work, I made my job finding work. Weekends and holidays were especially lucrative, and Craigslist and TaskRabbit were my best friends.
I would venture to say that I’ve worked the majority of weekends and holidays for the past four years. At certain points, I was so tired and sick of working, but the dream of being free of my debt kept me going.
I knew I didn’t want to spend one more day than I had to with the burden of student loans. To me, student loans felt like a ball and chain, holding me back from everything I wanted to accomplish.
Although it seemed never-ending at the time, I can now say that working so hard was worth it. It wasn’t always glamorous and it wasn’t always fun, but it helped me pay off student loans even faster.
I Lived Like a College Student
I’m 31 years old; many people my age are “settling down” with houses, new cars, and little ones on the way. There’s absolutely nothing wrong with that and it seems like a natural progression in life. However, I knew if I wanted to make debt repayment my priority, I had to continue to live like a college student.
I focused on the big three expenses first: housing, food, and transportation:
- My partner and I live in a small studio apartment together (it’s romantic!).
- I don’t have a car and mostly bike or walk everywhere.
- I limit my food expenses by buying fewer packaged foods and cooking instead.
In addition to the big three expenses, I also said no to having pets, cable, clothes, makeup, a gym membership, and most other luxuries.
That’s not to say I had no fun — I still budgeted for some travel and restaurant outings, as I believe it’s important to have some fun and rewards while paying off debt, or else debt fatigue will set in.
I Quit My Job
Now, this is not a standard tactic I would recommend for most people. But quitting my job and starting my own business was one of the best financial decisions I made.
After a year and a half in Portland, I eventually found a full-time job paying $31,000. I was ecstatic about a nearly $10,000 raise over the year before, plus benefits. At the same time, my side hustles became more specialized. I started freelance writing on the side, managing social media and more.
Though there was a huge learning curve for managing my own side business, I started to see that it could potentially be more lucrative than my full-time job at a nonprofit. And having been a longtime nonprofit employee, I knew the probability of me making much more was small.
So after I built up my client base and was making at least what I made at my day job, I quit my job and struck out on my own. It felt like a huge risk at the time, quitting my steady job when I had so much debt.
But a funny thing happened when I quit my job. My mindset shifted and I was determined to make it work. I would not fail and I would make sure that I made more than my day job, so I could pay off student loans.
It didn’t happen overnight, or easily, but after six months of trial and error, I started making more money than I ever had. After a year, I more than doubled my income.
I had always put roughly 50 percent of my income towards debt. When you’re making $31,000 before taxes, that’s not a lot. After quitting my job and doubling my income, I was able to put $30,000 toward debt this year alone.
Many people in personal finance extol the virtues of cutting your expenses. I think that’s one important part of personal finance, but there’s only so much you can cut back on. You’ll always have some expenses. I found that earning more — even if it required more “work” — was far more fruitful for my debt payoff efforts and helped land me a new career.
Now that I’m debt-free, I plan on replenishing my savings, some of which I used to help make the last payment and get laser-focused on investing. I also plan to enjoy more travel.
Want to Pay Off Student Loans?
I know just how hard, long, and annoying the debt payoff process can be, but here’s my advice:
- Know that being debt free is possible, even if it doesn’t happen overnight.
- You have to change your lifestyle.
- Paying off debt is a lot about mindset and not just money.
- You have to always remember why you’re doing it (for me, it’s freedom and travel).
- Don’t beat yourself up over debt — we all make mistakes, some months are better than others.
- You have to be ruthless about your goals — what you’re willing to spend money on and what you’re not (and some people may not agree with you/be offended by it, and that’s okay).
What strategies have you used to pay off student loans?
Interested in refinancing student loans?Here are the top 7 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|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 3.45% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.81% APR (with Auto Pay) to 6.49% 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 November 6, 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 11/06/2019. 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.
2 Important Disclosures for SoFi.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
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. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
ANNUAL PERCENTAGE RATE (“APR”)
There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.
For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
ELIGIBILITY & ELIGIBLE LOANS
Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).
Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.
All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.
For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.
The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.
The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.
POSTPONING OR REDUCING PAYMENTS
After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.
We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.
We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.
If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of November 8, 2019 and is subject to change.
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.
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 1.9299999999999997% effective October 10, 2019.
6 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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 11/07/2019 student loan refinancing rates range from 1.90% to 8.65% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.
7 Important Disclosures for College Ave.
College Ave Disclosures
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1College Ave Refi Education loans are not currently available to residents of Maine.
2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 09/23/2019. Variable interest rates may increase after consummation.
|1.81% – 6.49%1||Undergrad & Graduate|
|2.31% – 7.36%2||Undergrad & Graduate|
|1.99% – 6.65%3||Undergrad & Graduate|
|2.43% – 7.60%4||Undergrad & Graduate|
|2.02% – 6.30%5||Undergrad & Graduate|
|1.90% – 8.65%6||Undergrad & Graduate|
|2.74% – 6.24%7||Undergrad & Graduate|