Every time you check your bank account balance, you feel a pang of anxiety. You think, “Do I have enough to get by this month?” You might even feel like you can’t pay your student loans. It’s a tough place to be, especially when dealing with the burden of student loan debt.
How can you pay back student loans when you can barely pay your bills? It’s not easy, but here are a few things you can do to pay off debt on a limited income.
1. Be a cost-cutting machine
When you’re broke and paying back student loans, you need to evaluate each of your expenses. Ask yourself:
- Do I need this?
- Can I get this cheaper from somewhere else?
- What value does this add to my life?
For basic needs, like rent, food, and transportation, look for ways to lower costs, such as by:
- Getting a roommate
- Renting out your apartment on Airbnb
- Downsizing to a cheaper home
- Finding ways to lower food costs
- Negotiating lower payments for your bills
- Going to local schools and community clinics for things like haircuts and dental care
- Selling your car
- Shopping for cheaper insurance
- Walking or biking where possible
Comb through all of your expenses to see where you can cut back. It’s not that you are cutting these things out forever — it’s just a temporary measure until your situation improves.
Cut out most of your “wants,” but not all of them. Keep one thing for yourself. This can help you feel like you haven’t lost everything. For me, it was Netflix.
Being broke and paying off debt isn’t about never having fun — it’s more about being creative with your resources. Remember, you can still check out free books from the library, go to free concerts, visit museums during free hours, and go to art walks.
Cutting back on your spending is the first thing you can do to pay back student loans when you have little to no resources. But there is another side to this equation that can help you even more than cutting expenses.
2. Find ways to earn more money
Cutting back is a great way to do something today and see results. But when you’re broke, cutting back often isn’t a choice, it’s a necessary lifestyle. Luckily, there is another way to improve your situation so that you can continue to pay off debt: Earn more money.
A few years ago, when I was broke and paying off debt, I felt inspired by earning more. It was good for my finances and my confidence and helped me stay on track with my debt repayment goals.
Earning more money requires you to embrace a different mindset than cutting back. Instead of being a cost-cutting machine, start thinking of yourself as the boss of your own life. You are a business owner. How can you make and earn more money?
There are countless ways to bring in a little bit of extra income, such as by:
- Selling your old stuff, like CDs and books
- Freelancing as a coach, consultant, tutor, or writer
- Being a background actor in film and television
- Adjusting your tax withholding so instead of getting a refund, you earn more per paycheck
- Using a cash back credit card and paying it back in full each month
- Opening a new bank account for the cash bonus
- Picking up a second job
- Working as an Uber or Lyft driver
- Becoming a virtual assistant
Keep in mind that these are just some ideas. The ways you can earn extra cash are only limited by your imagination.
3. Adjust your loan repayment plan
When you’re broke and trying to pay back student loans, everything seems like a struggle. To make things a little easier, consider adjusting your repayment plan.
- Sign up for an income-driven repayment plan, which caps your monthly payment at 10 to 20 percent of your discretionary income.
- Research loan forgiveness programs, such as Public Service Loan Forgiveness and Teacher Loan Forgiveness.
- Consider deferment or forbearance, which pauses your payments for a period of time.
The most important thing to remember is to stay in touch with your lender. If you are having trouble making payments, contact your lender right away. If you can’t pay your student loans and neglect to contact your lender or take action, your loans could end up in default, which has serious consequences.
4. Try something unconventional
If you want to pay back your student loans but have a limited income, you may want to try some unconventional strategies to get out of debt.
- Sign up for Givling, an online game that helps pay back student loans. You don’t even have to play the game to get your loan paid off.
- Find a job where your rent is covered, like a camp counselor, hostel worker, or in some cases, a teacher working abroad.
5. Don’t give up on your student loans
Debt can feel like a huge burden when you are struggling to pay basic expenses. Don’t give up hope. Practice gratitude for what you have, not what you don’t. Look for better-paying opportunities, say yes to overtime, and be open to new things coming your way.
Your self-worth is not your net worth, so don’t beat yourself up. Understand that student loan repayment is a marathon, not a sprint. You’ll get there in time.
Interested in refinancing student loans?Here are the top 6 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 3.47% APR (with Auto Pay) to 7.59% APR (with Auto Pay). Variable rate loan rates range from 2.27% APR (with Auto Pay) to 6.89% 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 August 15, 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 08/15/2019. 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
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 2.37% effective July 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.27% – 6.89%1||Undergrad & Graduate|
|2.27% – 7.75%2||Undergrad & Graduate|
|2.43% – 6.65%3||Undergrad & Graduate|
|2.24% – 6.67%4||Undergrad & Graduate|
|2.37% – 7.95%5||Undergrad & Graduate|
|2.46% – 9.24%6||Undergrad & Graduate|