Paying off $30,000 of student loans in under two years would be difficult for anyone. Doing it on an entry-level salary would be even more challenging.
A lot of stories about people paying off their loans focus on increasing incomes with side gigs or windfalls, but Garza paid off her debt solely by cutting her expenses and eliminating extra spending. Through persistence and diligently monitoring her debt, she was able to become debt-free.
Planning for graduation
Garza graduated from the University of Florida and, like millions of other students, she had significant student loan debt. But unlike other students, she started tackling her debt way before graduation.
“The thought of paying more than $30,000 in interest was sickening,” says Garza. “I didn’t want to put myself in the position of having thousands more added in interest.”
Even though her first payment was not due until six months after her degree, she started making payments while still in school. That helped her get ahead of the interest and start making progress on the principal before she even graduated.
Keeping the momentum
With a starting salary of $30,000, there was not a lot of room in her budget for extra loan payments — but Garza knew that paying the minimum would not make enough progress on the debt. She needed to stretch her budget to pay more against the principal.
Though her minimum payment ate up a good chunk of her income, Garza was determined to pay off her debt as soon as possible. She freed up more money by cutting her expenses to the bone.
She looked for housing that was less than she could afford to free up more cash for loan payments. That meant renting the cheapest apartment she could find, even though it wasn’t very luxurious.
“It was a $500 a month, one-room apartment with several roach roommates,” says Garza. “But it let me put everything towards debt. It wasn’t glamorous, but it was necessary.”
To furnish her home, she borrowed furniture from friends or picked up free castoffs off of Craigslist. She set a strict grocery budget and limited her entertainment to free events.
Garza also learned that everything is negotiable when she called her cell phone provider and other services to talk down her rates. She would call each in turn regularly to negotiate her plans and lower her monthly payments.
“It wasn’t so much about pinching pennies, but about not wasting them,” says Garza.
Garza admits that living on such a tight budget was hard, but it was worth it for her. She kept herself motivated and focused by taking meticulous screenshots of each payment to track her progress.
“Seeing the principal go down more and more was so encouraging,” says Garza. “Having those screenshots helped me when I was frustrated with my budget and debt.”
When she got married, she was even more intent on paying off the debt quickly.
“I didn’t want someone else to have to pay for my education,” says Garza. “I wanted to do it myself.”
Paying off the loans
After 19 months of throwing every extra dime at her debt, Garza paid off her loans in full. But it turns out her screenshots came in handy.
“After I made the last payment, I checked in one more time on my accounts. The loan company had added $1,000 to my account due to a processing error. Without my screenshots proving I had completely paid off my debt, I would have thought I owed that money,” says Garza.
Garza called her lender to have the issue fixed, and they corrected the $1,000 mistake. Then Garza realized she was finally debt-free, one year and seven months after starting her journey.
“It was a strange feeling. I had been so focused on paying off my loans for so long; it felt a little anticlimactic,” says Garza. “But not having that burden over me anymore was amazing.”
Finding financial freedom
With her student loans gone, Garza had the freedom to pursue the career she wanted. She is now a freelance writer, writing content about professional development and resume best practices for a diverse range of clients.
“Getting rid of the debt let me choose my own career path rather than getting stuck in a role I didn’t like,” says Garza.
Without a large income, Garza was able to conquer over $30,000 by watching her budget and eliminating extras. Being so stringent and focused helped her overcome her debt. If she had not kept herself on track, she would still be making payments on her loans and would owe thousands more in interest.
“It was not easy, but the sacrifice was so worth it,” says Garza.
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 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% 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 email@example.com, 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 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|