For the average student loan borrower, it can take several years – if not decades – of patiently making monthly payments to get that balance owed to zero. That’s assuming, of course, a good salary and no major money trouble.
But take the statement “Debt Free after Three” and it perfectly summarizes what Zina Kumok was able to do that most other grads can’t: she paid off $28,000 in federal student loans in just three short years.
“Sometimes,” Kumok recalled, “I look back and I think, ‘How did I do that?’” Though it seemed like some insurmountable financial feat, Kumok relied on simple discipline and proactive ways to decrease her expenses, increase her income, and combine both to completely pay down her debt.
So how did she do it? Keep reading to learn the steps Kumok took to quickly become debt free, and how she’s used the experience to inspire others to do the same.
Year 1: New degree, new job, $350 in monthly payments
Kumok graduated in 2011 with an undergraduate degree in journalism, but no immediate employment opportunities – not very encouraging with nearly $30,000 in student loans to pay off.
”Honestly, the first year was really tough, because that was the least amount I made, and I had no savings,” she said.
Luckily, within six months of graduation, Kumok landed a staff writing gig at a newspaper, but the salary wasn’t much more than her total debt load. According to Kumok, the $350 monthly loan payment equated to 20 percent of her take-home pay. While she was able to live within her means and cover her other expenses, this wasn’t an acceptable option for her.
“I knew I wanted to pay off my loans, but I couldn’t do that on a salary,” she said. “I stuck to a budget and was very deliberate in what I was spending.”
Year 2: Better paying job, expenses cut, $750 in monthly payments
By year two, Kumok was able to more than double her monthly loan payment, both with a new job with a better salary, and several frugal lifestyle changes.
To start, her new writing job afforded her more pay, which meant more money towards reducing her debt. By this point in 2012, Kumok had relocated to the same city as her then-boyfriend/current husband, which helped her save at least $200 in gas money from the long distance driving she’d been doing every weekend.
By 2013, her debt balance was whittling down more quickly than she’d expected. At the end of year two, nearly half of her debt was behind her.
Year 3: Roommates, $950 in monthly payments, no more debt
By the third and final year it took Kumok to completely pay off her loans, she was able to increase her monthly payments to about $950, aided in no small part by finding roommates who could help reduce her rent. Instead of spending the remainder, Kumok applied it towards her monthly loan repayment.
In November 2014, three years and six months after graduating college, Kumok was debt-free – a remarkable accomplishment considering the alternative. Kumok had nearly resigned herself in 2011 that she’d be paying her student loans off for a least a decade. That means today, in 2016, she’d still have five years left to go.
Regrets and lessons learned
If three years to pay off $28,000 seems like lightspeed, consider she may have eliminated her debt even faster, in retrospect. According to Kumok, one regret was how much money she’d spent in college rather than saving.
“I had money for going out and had plenty of money in college,” she said. But, “I spent money like an idiot. I could have saved more if I had a savings account. I just spent so much of it and thought, ‘No problem, I’ll pay off those loans when I get a job.’ But i didn’t know how much it’d pay when i got a salary.”
During undergrad, Kumok’s parents had covered her living expenses, gas, groceries, and utilities, freeing up plenty of cash that could have gone towards monthly loan payments.
Though she wasn’t in debt at the time, she “didn’t have the mindset,” Kumok said.
Kumok ultimately credits her parents’ candor about their own financial missteps in life as a critical influence for her own financial awareness.
“My parents always talked about their personal finances as they related to their own lives,” she said. “It just interested me that they were always open about their mistakes. I was able to see how being in debt affects you firsthand and affects the ability to have the life you want.”
Helping others avoid student loan debt
The experience of aggressively paying down her student loan debt was so profound that Kumok has since become a crusader to help others do the same. Now a full-time freelance writer, her blog, DebtFreeAfterThree.com features articles and tips on how to maximize one’s finances, save money, and escape from debt.
“For everyone, there are really two strategies to pay debt: usually spend less or make more,” said Kumok. “I would really encourage people to make more money, whether it’s negotiating a better salary, getting a bonus, finding a way to make money on the side.”
That may include anything, she says, from saving $100 by eating out only once a month, or getting a part-time job at the mall. For the recent college grad, it may not seem like much. But over time, when your momentum builds, you’ll see the impact it can make in paying down your debt.
“It’s like dieting,” she said. “We all know you should exercise and eat less and burn more calories than you eat. Yet this country is obese. It’s the same with money; you just spend less than you make, yet the whole country’s in debt. It’s simple, yet requires a lot of hard work and discipline.”
Don’t beat yourself up for taking a bit longer to pay down your student loans. Everyone’s balance, interest rates, income, and financial situation are different, so work at your own pace. What’s important, according to Kumok, is not the speed in which you eliminate your debt, but having a realistic goal in mind to attain.
“I would say definitely having a goal in mind is good,” she says. “It’s really easier to say, ‘I’ll pay them off sometime.’ For me, I knew when I sacrificed something, I knew what it was going towards. If you don’t know where it’s going, you don’t have the motivation.
“I think we all need to see there’s going to be a light at the end of the tunnel.”
Interested in refinancing student loans?Here are the top 8 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 3.20% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.99% 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 December 13, 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 12/13/2019. 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 Figure.
Figure’s Student Refinance Loan is a private loan. If you refinance federal loans, you forfeit certain flexible repayment options associated with those loans. If you expect to incur financial hardship that would impact your ability to repay, you should consider federal consolidation alternatives.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
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. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
ANNUAL PERCENTAGE RATE (“APR”)
There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.
For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
ELIGIBILITY & ELIGIBLE LOANS
Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).
Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.
All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.
For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.
The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.
The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.
POSTPONING OR REDUCING PAYMENTS
After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.
We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.
We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.
If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of November 8, 2019 and is subject to change.
5 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.
6 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 1.76% effective November 10, 2019.
7 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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 12/07/2019 student loan refinancing rates range from 1.90% to 8.59% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.
8 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 12/1/2019. Variable interest rates may increase after consummation.
|1.99% – 6.89%1||Undergrad & Graduate|
|2.31% – 7.36%2||Undergrad & Graduate|
|1.99% – 6.75%3||Undergrad & Graduate|
|1.99% – 6.65%4||Undergrad & Graduate|
|2.43% – 7.60%5||Undergrad & Graduate|
|1.85% – 6.13%6||Undergrad & Graduate|
|1.90% – 8.59%7||Undergrad & Graduate|
|2.74% – 6.25%8||Undergrad & Graduate|