5 Steps This Woman Took to Pay Off Nearly $75,000 in Student Loan Debt

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This report was originally published Aug. 15, 2016.

When Beth Walker graduated with her bachelor’s degree in 2008, she had $60,000 in student loan debt.

And when she got her Master of Business Administration (MBA) in 2010, she increased her total to almost $75,000 in student loan debt.

What’s more, Walker was only earning $35,000 a year from her first job out of college. But she was determined to make her payments. In fact, she thought she could do better. As a result, she made a plan to pay off her debt in January 2017. Here’s what she did.

  1. Embraced debt avalanche method to pay off almost $75K loan
  2. Put herself on a tight budget — and stayed on it
  3. Bought a house and got roommates to help with mortgage
  4. Lived where there were job opportunities, low living costs
  5. Looked beyond her student loans

1. Embraced debt avalanche method to pay off almost $75K loan

First, Walker consolidated six federal student loans totaling $25,000 at an APR of 6.8%. She also had two private student loans — one for $39,000 with a 3.9% APR and another for $10,000 with a 2.5% APR.

She opted for the debt avalanche method, putting as much toward the highest-interest loan as possible while paying the minimum on the other two. That means she started paying off the $25,000 loan first.

Though Walker understands the appeal of the debt snowball method — paying off the lowest balance first so that you see concrete results faster — she found debt avalanche offered a similar sense of accomplishment.

Walker used the ReadyForZero app (which has since shut down) to determine her payoff date and see her daily interest. If you’re looking for another app, you could consider Mint, Debt Free (iOS) or Debt Payoff Planner (Android).

Once Walker had paid off the $25,000 loan, she began focusing on the loan with the next-highest interest. With just $2,500 left on the $39,000 loan and $7,000 on the $10,000 loan as of mid-2016, Walker aimed to pay everything off early in 2017.

2. Put herself on a tight budget — and stayed on it

“The whole time I was working on my MBA, I lived with my parents and saved up my money,” said Walker, who worked full time.

With her salary at $35,000 a year, her first priority was putting $1,000 a month toward her nearly $75,000 student loan debt. Her second priority was allotting just $400 a month for basic living expenses. Whatever was left, she put toward her savings.

“If I didn’t have enough money for something I wanted to do, then I just didn’t do it,” Walker said.

Sticking to a budget requires discipline, but Walker noted that it is essential to pay down debt in a timely manner and avoid additional interest charges. And even as Walker’s salary had doubled as of mid-2016, she still stuck to the same budget.

It’s easy to spend more money when your salary doubles, but you need to commit to not getting in additional debt or spending your increased salary on unnecessary expenses. And for Walker, the only thing that changed was her ability to double up on her student loan payments — every time she got a raise, she put it toward her student loans.

“I live paycheck to paycheck, but it’s a choice because I have goals I’m focused on achieving,” she said.

Walker also kept her other debts at a minimum. For instance, when she’d make a big purchase with a credit card, she does so with an interest-free offer. Then she’d pay off the entire balance before the introductory interest rate ends.

It can be tempting to buy a new car or go on a fancy vacation once your student loans are paid off, but by sticking to a tight budget and making a conscious choice to avoid more debt, you’ll be able to pay off your existing loans quickly and save money for your retirement.

3. Bought a house and got roommates to help with mortgage

“At first, I was just saving money to pay off the loans,” Walker said. “And then one day I just thought, I’m going to buy a house.”

While still living at her parents’ house — and without breaking the bank — she bought a condo. Then she got a couple of roommates to help cover most of the mortgage.

4. Lived where there were job opportunities, low living costs

To keep her plan in order, Walker depended on the relatively low cost of living in Raleigh, N.C., to help, though she did acknowledge that “my plan would never work for someone who lives in a big city.”

In mid-2016, she was employed in IT sales, and suggested that North Carolina’s capital was a perfect place to find work as an IT sales rep.

“I know it’s a big deal to make a big move, but look at the cost of living in your area,” she said. “Would there be better job opportunities someplace else, where you could also live so much cheaper?”

5. Looked beyond her student loans

Once her approximately $75,000 in student loans were to be paid off, Walker would be free to pursue some of her other financial goals.

But while her main focus continued to be paying off debt, Walker bought another house in January 2016 and lived there while she rented out the condo. After paying off her student loans, Walker planned to put the extra money toward paying off both mortgages.

She was also thinking about buying a new car — well, a used car. This was just one of the many ways she planned to continue living below her means.

One area where Walker wasn’t cutting corners is her retirement savings. She contributed more than the minimum to her company’s 401(k) match, and has also raised her contribution by 1% every year.

Back in 2016, Walker vowed to stay on that same track, even after she’d reached her goal: “I won’t change my lifestyle too much when the loans are paid off. You choose what’s important, and this is what’s important to me.”

Indeed, her extreme financial discipline allowed her to pay off $75,000 in student loans. She crushed her debt by sticking to a budget, living with relatives to avoid additional housing costs and eventually buying a home and renting it out to help with the mortgage.

Other ways to earn extra cash

Beyond the tips Walker provided, you could consider other ways to earn extra money to pay off student loans or debt.

Take Marie Kondo’s advice and declutter your home, but take it one step further and sell your items for extra money. Consider putting your items on eBay or Craigslist, whether that’s a bicycle or comic books.

Another way to earn extra money is to become a landlord or property manager. If you are able to purchase a home or condo and rent it out, you can make a substantial amount of additional money. But before you become a landlord, you’ll want to make sure the amount you make each month covers the mortgage and provides enough extra money to put toward your loans.

Lastly, consider taking on a side hustle. Like photography or music? Consider becoming a wedding photographer or DJ on the weekends. You can also look for part-time jobs with perks or benefits that will save you money. For example, if you work at a restaurant, you may get a discount on food or even a free meal. The money you save could go toward your student loan payments.

The additional work now will not only help pay off your loans more quickly, but it will pay off in the future if you’re living a debt-free life with little to no financial stress.

Sage Evans contributed to this report.

Interested in refinancing student loans?

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1 Important Disclosures for Earnest.

Earnest Disclosures

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 7.49% APR (with Auto Pay). Variable rate loan rates range from 2.14% APR (with Auto Pay) to 6.79% 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 September 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 09/06/2019. 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 hello@earnest.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.


2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.48% APR to 7.94% APR (with AutoPay). Variable rates from 2.14% APR to 7.71% 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 2.14% APR assumes current 1 month LIBOR rate of 2.14% minus 0.15% 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. See eligibility details. 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 Laurel Road.

Laurel Road Disclosures

FIXED APR
Fixed rate options consist of a range from 3.50% per year to 5.55% per year for a 5-year term, 4.00% per year to 6.00% per year for a 7-year term, 4.30% per year to 6.40% per year for a 10-year term, 4.60% per year to 6.80% per year for a 15-year term, or 5.05% per year to 7.02% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan). The monthly payment for a sample $10,000 loan at a range of 3.50% per year to 5.55% per year for a 5-year term would be from $184.00 to $193.00. The monthly payment for a sample $10,000 loan at a range of 4.00% per year to 6.00% per year for a 7-year term would be from $138 to $148. The monthly payment for a sample $10,000 loan at a range of 4.30% per year to 6.40% per year for a 10-year term would be from $104 to $115. The monthly payment for a sample $10,000 loan at a range of 4.60% per year to 6.80% per year for a 15-year term would be from $79 to $91. The monthly payment for a sample $10,000 loan at a range of 5.05% per year to 7.02% per year for a 20-year term would be from $68 to $80.

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.

VARIABLE APR
Variable rate options consist of a range from 2.43% per year to 6.05% per year for a 5-year term, 3.75% per year to 6.10% per year for a 7-year term, 4.00% per year to 6.15% per year for a 10-year term, 4.25% per year to 6.40% per year for a 15-year term, or 4.50% per year to 6.65% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. 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. The variable interest rates are calculated by adding a margin ranging from 0.25% to 3.80% for the 5-year term loan, 1.50% to 3.85% for the 7-year term loan, 1.75% to 3.90% for the 10-year term loan, 2.00% to 4.15% for the 15-year term loan, and 2.25% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 2.43% per year to 6.05% per year for a 5-year term would be from $179 to $195. The monthly payment for a sample $10,000 loan at a range of 3.75% per year to 6.10% per year for a 7-year term would be from $137 to $148. The monthly payment for a sample $10,000 loan at a range of 4.00% per year to 6.15% per year for a 10-year term would be from $103 to $114. The monthly payment for a sample $10,000 loan at a range of 4.25% per year to 6.40% per year for a 15-year term would be from $77 to $88. The monthly payment for a sample $10,000 loan at a range of 4.50% per year to 6.65% per year for a 20-year term would be from $65 to $77.

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 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.

CommonBond Disclosures

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 2.19% effective August 10, 2019.


6 Important Disclosures for LendKey.

LendKey Disclosures

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.


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 08/01/2019. Variable interest rates may increase after consummation.

2.14% – 6.79%1Undergrad
& Graduate

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2.14% – 7.71%2Undergrad
& Graduate

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2.43% – 6.65%3Undergrad
& Graduate

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2.43% – 7.60%4Undergrad
& Graduate

Visit Splash

2.14% – 8.01%5Undergrad
& Graduate

Visit CommonBond

2.06% – 8.93%6Undergrad
& Graduate

Visit Lendkey

2.74% – 7.24%7Undergrad
& Graduate

Visit College Ave

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. 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 to help you understand what you are buying. Be sure to consult with 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.

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