8 Secrets From Experts for Conquering Debt Forever

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Debt has become about as American as hot dogs and apple pie. The average household in America has more than $6,000 in credit card debt — and that’s just one piece of the puzzle. When you add mortgages, auto loans, student loans, and medical debt, it’s no wonder some feel like they’re drowning.

As if that wasn’t tough enough, it’s not unusual to run yourself ragged to pay off debt only to find yourself right back in the same place years later.

If that’s happened to you, no one blames you for feeling frustrated. Let the frustration happen, but then turn it into action. Here are eight tips for paying off debt — for good — from financial experts who’ve been there and seen it all.

8 expert tips for paying off debt once and for all

1. Get your mind right

It’s hard to make any monetary progress before you center yourself. Andrew Daniels, founder of Family Money Plan, explained why.

“Getting out of debt takes time. Think like a marathon runner instead of a sprinter. Because the marathoner is ready for the long haul, while the sprinter is exhausted almost immediately after starting.”

As tempting as it is to rush to pay down your debt as quickly as possible, focus instead on how to pay off debt sustainably. This is even more important if this is your second time around with debt.

2. Evaluate your true goal

It’s also important to understand what kind of relationship you want to have with debt. Here’s what Carrie Smith Nicholson of Careful Cents has to say.

“Living a debt-free life is totally different than being debt free once. So ultimately your decision comes down to being debt-free versus living debt-free. Being debt-free means that you don’t mind being in a small amount of debt, or with controllable debt, while living debt-free means no debt ever.”

Before you get started, decide what type of life you want.

Some people choose to avoid debt forever after paying it off because they’re fearful of being in over their heads or simply don’t want to pay interest on anything ever again. Others, however, might find ways to strategically use debt to reach their goals without falling into previous traps.

The upside to living without debt is knowing you’ll never fall in too deep again. The downside is that individual financial goals can become less attainable, such as owning a home. Of course, the opposite of each goes for living with debt. You might be able to attain more of your dreams — but they’ll come at a cost.

There’s no right or wrong answer here. If you don’t think you can handle debt again, then deciding to avoid it is fine. But if you feel ready to do it better the next time — or only take on amounts that are more affordable to pay off — then just make sure you carry the lessons you’ve learned throughout the repayment period.

3. Uncover the source of the debt

After you’ve looked forward, the next step is to take a look backward. Now’s the time to understand why you have debt in the first place (or for the second or third time).

Financial behaviorist and author of “Financial Intimacy: How to Create a Healthy Relationship with Your Money and Your Mate,” Jacquette M. Timmons, weighed in.

“Take stock of the reasons you accumulated the debt. If you don’t invest the time to identify why you got into debt, along with your debt patterns, you’ll never stay out of debt for too long.”

Then move on to the emotional side of debt. Erin Lowry, author of “Broke Millennial: Stop Scraping By and Get Your Financial Life Together,” explained how.

“Landing back in debt might very much have to do with your relationship with money. Getting an accountability buddy, a money coach, or even a financial therapist might help you, not only get out of debt again, but stay out for good.”

4. Master your cash flow

Now let’s get down to the numbers. This is where you can learn tips for paying off debt faster — but it’s still important to understand your cash flow first.

Douglas A. Boneparth, a financial planner who runs the advisory firm Bone Fide Wealth and co-authored “The Millennial Money Fix,” suggested becoming the master of your cash flow.

“This means that you have an intimate understanding of the money moving in and out of your life. So much so that you can anticipate what’s going to happen up to three months down the road.”

So, how do you do it? According to Boneparth, it’s all about the budget:

“Masters of cash flow start by creating a budget and then reconciling that budget against what’s actually happening over a period of time to see if your monthly average is aligned with what you’ve budgeted. If it hasn’t, and you’ve gone over, you need to be honest with yourself about your spending and what you really want for yourself.”

From there, goal setting can swoop in for the win.

“I find that those clients of mine that have identified, quantified, and prioritized their goals do a much better job of staying out of debt and actually become great savers. Having direction in life and going after the things you really want tend to help people build discipline.”

5. Build an emergency fund first

The first thing you should think about as a cash flow master is sending some of that money over to an emergency fund. Matt Becker, financial planner and founder of Mom and Dad Money explained why.

“No matter what your interest rates are, build a $1,000 savings cushion before making extra debt payments. With that in place, you can handle unexpected expenses without adding to your debt while you’re trying to pay it all off.”

Debt can be like a black cloud threatening you with a storm every day, which is why so many of us only want to focus on tips for paying it off faster. But not being prepared with an emergency fund can lead to even greater setbacks.

Life happens. Have some money put aside for emergencies, so they don’t derail your payoff plan once it’s in action.

6. Strategize, strategize, strategize

It’s time for the fun part, creating a debt payoff strategy. This can help you stay focused on the road ahead.

Two popular strategies are the debt avalanche and debt snowball. Both advise targeting your debt payoff by either paying off the highest interest rate (debt avalanche) or lowest balance (debt snowball) first while maintaining your minimum payments on the rest.

The magic of these plans is that you maintain your monthly debt payment amounts even as things get paid off. By doing so, you create momentum to pay off your debt faster.

Next up is to lower any interest rates you can. Shawn Tydlaska, financial planner and founder of Ballast Point Financial Planning, has helped clients do this with balance transfer credit cards. But you still have to create a plan.

“I have seen some clients refinance credit card debt with a balance transfer, only to find themselves still in debt when the promotional period ends.”

What you can do is divide your balance transfer balance by the number of months you have until the rate goes up. That amount should become your new monthly payment. But don’t ignore your other debt. “Once we refinance their debt, we come up with a game plan to pay off any remaining cards that do have an interest rate.”

7. Don’t get caught up racing to zero

By taking the steps above, you’ll likely be making major progress toward your freedom from debt.

But as financial writer Kali Hawlk explained, you should also make sure not to put too much pressure on yourself.

“Don’t get caught up racing to zero. Getting rid of debt is important, but you should try to strike a balance if you want to work steadily toward overall financial success (instead of achieving just this one goal of debt repayment).”

8. Don’t beat yourself up

Finally, be kind to yourself. Debt is frustrating. Debt can be agonizing. And the second time around with debt can amplify those emotions even more.

Break through these feelings with the reminder that debt can happen to anyone. Then heed the advice of financial writer and debt-payoff veteran Cait Flanders.

“Don’t beat yourself up over any of the decisions you’ve made that have gotten you back here. The most important thing you can do is change your mindset about your debt, and that starts with making peace with the situation.”

And, while you’re at it, remember the good things you’re already doing. “The fact that you’re aware of the numbers is a great first step. Now it’s time to change the story you’re telling yourself and decide today is the day you’re going to start working toward your debt-free future.”

Carve your path on the road to debt freedom

As personal finance expert Eric Rosenberg said, “The path to debt freedom is simple — spend less than you earn every month, and use the difference to pay down your debt.”

But figuring out just how to make that happen and stay motivated is going to be different for everyone. As you’ve already seen from having debt, paying it off, and ending up there again, sustainability is going to be the key to lasting success.

What’s more, expect that you’ll falter along the way. There’s nothing wrong with failure. What matters is what you do with it. Analyze what tripped you up, consider changing strategies if you need to, and then get moving again.

Paying off debt once and for all is no easy feat. But if you’re determined to accomplish it, then don’t let anything stand in your way.

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1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. 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.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% 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 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% 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. 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 CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. 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 understand what you are buying, and consult 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. Please do your homework and let us know if you have any questions or concerns.