7 Steps to Becoming Debt-Free

How Student Loan Hero Gets Paid

How Student Loan Hero Gets Paid

Student Loan Hero is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). Student Loan Hero does not include all lenders, savings products, or loan options available in the marketplace.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Student Loan Hero is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

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If you’re drowning in debt, you’re not alone. A 2018 Student Loan Hero survey found almost 40% of millennials say debt is their No. 1 source of financial stress. And two-thirds of millennials never learn how to tackle their debt.

Debt stress not only cripples your finances, but also your health. Stress can lead to chronic pain and illness. Before your stress becomes too much to handle, get ahold of your finances and go debt-free.

Your 7-step guide to becoming debt-free

There are steps you can take to pay down your major financial obligations and start to live debt-free.

Create (and update) your budget

Not having a budget — or not following one — might be your biggest financial downfall. Having a budget tailored to your income, bills and needs is one of the best ways to keep your money on track.

Start by documenting your take-home pay and your necessary bills. This includes mortgage payments, electricity, car loans, insurance and anything that you need to pay on a monthly basis. You’ll also add spots for food and gas. See how much you’ve spent on both in the past three months and add those amounts to your budget.

Try to limit your food costs to only what you need, not what you want. Your restaurant line item should be very small.

Start paying your outstanding bills

Make sure your budget includes loans and credit card bills. Try to include how much interest you’re paying on a monthly basis. When you see how much interest adds up every month, you’ll feel motivated to pay your outstanding bills off sooner.

Payment history is the most important factor in your credit score. Making late payments — or no payments at all — can crush your credit. Start to pay anything that you’ve put off, such as student loans, a car payment or even credit cards. Try to start with making the minimum payment every month to get yourself on a solid payment schedule.

The longer you make on-time payments, the higher your credit score will rise. Stay on track and check your credit score often to watch for improvements. Remember: Checking doesn’t hurt your score.

Consolidate and refinance where possible

One way to get a handle on many outstanding loans is to combine them. If you have many student loan payments, you might want to consider consolidating or refinancing them. Having one streamlined payment can keep you organized and on track to pay every month. It can be difficult to keep track of many different loans.

If you have a mountain of credit card debt, consider taking out a personal loan to pay it off. You might qualify for a lower interest rate for a personal loan than what you pay in credit card interest. Keep in mind that it’s not for everyone, so weigh the pros and cons of credit card consolidation before signing up for a personal loan.

Ditch things weighing you down

It can be hard to make major life changes when you’re shifting your mindset on finances. Getting rid of financial burdens can come in many different forms.

  • Selling your car. If you own yours, selling your car and buying a less expensive one — or not buying another one at all — can give you some much-needed cash. If you can live without your car, consider selling it to pay down debt.
  • Moving out. Whether you move in with your parents to save on paying rent or you find a roommate to cut costs, re-evaluate your living situation. If you own your home, this also includes downsizing to a more economically affordable home.
  • Paying off big debt. If you get a big tax return or a bonus at work, put that money into paying off major debt burdens. Then you can tackle your other debt or build up savings.
  • Giving up your wants. Are you paying for things that aren’t as important as others, including cable TV or subscription services? If you don’t use them often or they don’t spark joy, it might be time to get rid of them.

Negotiate bills

While not every lender or servicer will budge, the first step to getting a lower bill is to simply ask.

Start with car insurance or your internet bill. All you’ll really need for both is time. Find competitors that offer better rates than what you’re paying now. Call your providers to see if they’ll match the promotional offer. Ask if they have any other deals for which you might qualify. If your lenders don’t budge, it’s time to switch to a company where you’ll pay less.

You can also try this with your credit card lender. Call to ask about what it can do to help you pay your outstanding balance down faster. It might help you lower your interest rate or move it with a balance transfer.

Increase your pay

Limiting your budget is an important step to getting out of debt. But if you aren’t earning enough money, you might stay in debt longer than others. Find ways to earn more money.

  • Ask for a salary increase. This can be overwhelmingly difficult if you aren’t sure how to go about it. But asking for more money is important, especially if you feel undervalued and underpaid.
  • Get a side hustle. If you’re struggling to earn more money in your day job, start working a side hustle doing something you love. Earning money after-hours is a great way to work on something you’re passionate about while also bringing in extra income to pay off your debt.

Save for everything

As your debt slowly goes down — or completely away — don’t throw away your newly pocketed cash. You don’t want to build up that debt again.

You might’ve struggled to save money while you were paying off debt. And if you haven’t started already, you should now. There are a couple of things for which you’ll want to stash money.

Emergencies

The last thing you need is to go into debt due to unforeseen circumstances. Start building your emergency fund. It should be around three to six months’ worth of expenses, which varies depending on your income and budget.

Try to hit $500 or $1,000 as soon as you can, and continue to build from there.

Retirement

Saving for retirement can seem like the last thing on your mind, especially if it feels so far away. But running out of money is a real thing that could happen in your later years. To avoid that, you’ll want to save for retirement as early and as often as possible. This can be through a work-sponsored 401(k) plan or an IRA.

Are you working to become debt-free?

Debt can be all-consuming and cripple your finances. But you don’t have to suffer through it anymore. Try not to rush out of debt. Instead, make a concerted, manageable plan to get out — and stay out — of debt forever.

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LendingTree allows you to compare rates from multiple lenders by filling out one easy form. How Student Loan Hero Gets Paid

How Student Loan Hero Gets Paid

Student Loan Hero is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). Student Loan Hero does not include all lenders, savings products, or loan options available in the marketplace.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Student Loan Hero is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

How Student Loan Hero Gets Paid

How Student Loan Hero Gets Paid

Student Loan Hero is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). Student Loan Hero does not include all lenders, savings products, or loan options available in the marketplace.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Student Loan Hero is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

RATES (APR)loan amount
5.99% – 18.85%1 $5,000 to $100,000
6.46% – 35.99% $1,000 to $50,000
5.94% – 35.97%* $1,000 to $50,000
99.00% – 199.00%2 $500 to $4,000
5.99% – 24.99%3 $5,000 to $40,000
7.99% – 29.99%4 $7,500 to $40,000
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NMLS #1136: Terms & Conditions Apply
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Fixed rates from 5.99% APR to 18.85% APR (with AutoPay). SoFi rate ranges are current as of March 19, 2020 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your creditworthiness, years of professional experience, income and other factors. See APR examples and terms. 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.
  2. To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, 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 pull.
    See Consumer Licenses.
  3. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  4. If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period, to the extent permitted by applicable law. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our Career Advisory Group to look for new employment. If the loan is co-signed the unemployment protection applies where both the borrower and cosigner lose their job and meet conditions.
  5. 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)
2 Includes AutoPay discount. Important Disclosures for Opploans.

Opploans Disclosures

Direct Deposit required for payroll.

Opploans currently operates in these states: . *Approval may take longer if additional verification documents are requested. Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications processed and approved before 7:30 p.m. ET Monday-Friday are typically funded the next business day.

  1. To qualify, a borrower must (i) be a U.S. citizen or permanent resident; (ii) reside in a state where OppLoans operates; (iii) have direct deposit; (iv) meet income requirements; (v) be 18 years of age (19 in Alabama); and, (vi) meet verification standards.
  2. NV Residents: The use of high-interest loans services should be used for short-term financial needs only and not as a long-term financial solution. Customers with credit difficulties should seek credit counseling before entering into any loan transaction.

  3. OppLoans performs no credit checks through the three major credit bureaus Experian, Equifax, or TransUnion. Applicants’ credit scores are provided by Clarity Services, Inc., a credit reporting agency.

  4. Based on customer service ratings on Google and Facebook. Testimonials reflect the individual’s opinion and may not be illustrative of all individual experiences with OppLoans. Check loan reviews.

  5.  

    Rates and terms vary by state.

3 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.
4 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. The loan terms presented are not guaranteed and APRs presented are estimates only. To obtain a loan you must submit additional information and documentation and all loans are subject to credit review and our approval process. The range of APRs is 7.99% to 29.99% and your actual APR will depend upon factors including your credit score, usage and history, the requested loan amount, the stated loan purpose, and the term of the requested loan. To qualify for a 7.99% APR loan, a borrower will need excellent credit on a loan for an amount less than $12,000.00, and with a term equal to 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could help you also qualify for the lowest rate available. All loans are made by Cross River Bank and MetaBank®, N.A., Members FDIC.
* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

Personal loans made through Upgrade feature APRs of 5.94%-35.97%. All personal loans have a 2.9% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds should be available within four (4) business days. Funds sent directly to pay off your creditors may take up to 2 weeks to clear, depending on the creditor. Personal loans issued by Upgrade’s lending partners. Information on Upgrade’s lending partners can be found at https://www.upgrade.com/lending-partners/.

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