About 69% of college students who graduated in 2019 took out student loans according to Student Loan Hero. Of those students, the average student loan balance was $29,900. Many student loan borrowers are still paying their loans years and even decades after graduating, but is it possible to pay them off early?
Meet Brendan – he paid off $26.7K of his student loans in just 10 months. How did he do it? What did he sacrifice to make his debt pay off a priority? Keep reading to find out.
Why Should Student Loans Be Taken Seriously?
According to Student Loan Hero, Americans owe over $1.64 trillion of student loans from a combined 45 million borrowers. To give some perspective, the total US student loan debt is about $587 billion more than the total US credit card debt.
Let’s shed some light on a real life student loan debt pay off story.
Why Did You Decide To Pay Off Your Student Loans Early?
Brendan graduated in May of 2019 from college with $36K of student loan debt. He knew the average college graduate with student loans had about $30K of debt, so he recognized right away that he had a lot of work to do to get debt free. It took some time to get a job so he didn’t make payments until the grace period ended in December. Brendan made his first payment of about $500 and saw his balance barely go down.
“After a bit of math, I found that by paying the minimum payment each month, it was going to take me YEARS to pay off this debt; more time than it actually took me to get my degree in the first place. This just was not going to happen. So, I made a commitment. Let’s crush this thing by the end of the year.”
Brendan
What Did You Sacrifice In Your Budget So You Could Prioritize Paying Your Student Loans?
Once Brendan decided he was going to aggressively pay off his student loans, he did the math and made a plan. Of course this meant that he had to sacrifice to make all of those extra payments. As many other college grads moved into apartments, he saved on rent and lived at home with his parents. He sacrificed taking vacations and other wants, like craft beer, so that he could save more of his income to allocate to his student loans.
Learn about different types of bank accounts to find the right one for your lifestyle to help you reach your financial goals.
How Did You Stay Motivated To Pay Off Your Student Loans?
One way to stay motivated is to make a debt pay off plan and check on your progress. Brendan said, “I meticulously counted potential paychecks, tracked my finances on Excel, and consistently went back to my plan and tracking as motivation. In some moments, I was discouraged by my lack of progress. Debt payment is not an easy or flashy process. It takes discipline, consistency, and humility.”
Paying off debt is a challenging process, but it’s far from impossible. One of the most important factors is finding what keeps you motivated, whether it’s looking at your progress or having an accountability partner. Find out a few proven ways to help you stay motivated in our article.
How Much Money In Interest Have You Saved?
Paying off student loans early is not only liberating, but it also saves you money on interest compared to only making the minimum payments. For Brendan, by aggressively paying off his loans he will save about $6K in interest payments. Six thousand dollars may not sound like a lot, but that’s an extra $500 a month for an entire year.
What Are Your Financial Goals?
Brendan set out to pay off all of his student loans by the end of 2020. At the time of writing he has about $8K remaining and is very close to achieving his goal!
In the long-term, he says “I will look towards saving for a down payment on my first home post-debt free. I am looking forward to utilizing the discipline and consistency skills I have developed in my debt payment process to continue to save and invest in my future!”
Considering his impressive progress toward paying off his student loans in just 10 months, we’re sure Brendan can pay off his remaining loans and save for a down payment for a house!
To follow along Brendan’s journey, be sure to follow him on Twitter @bwpfinance and on Instagram @bw_finance. He also mentioned that he will soon be sharing a debt tracking tool, which was vital to his debt payoff progress.
How You Can Pay Off Your Student Loans Early
If you have student loans or any type of debt, you’re probably wondering how you can get started paying your debt off.
The first step is making the decision to prioritize paying off debt. Then set your goals, find the right repayment strategy for you, make a budget, find what motivates you and stick to your plan.
Let us know your progress so we can share your debt repayment success story in the future!
Financial freedom begins with good habits.
Rebecca & Tiago, theloadedpig.com