RelayRides blogger Eric Rosenberg paid off his student loans two years after graduating. Here are his tips on paying off your loans quickly and easily.
Students are graduating from college with increasing student loan debt. In 2012, the total student loan debt outstanding in the United States passed $1 trillion. I paid of my fair share of student loan debt, accumulating quite a lot paying for my $90,000 MBA program. Here are some tips I used, and others used, to pay off their student debt in half the time.
Work in School
The easiest way to keep your student debt low is to pay for as much as possible as you go. If you are still in school, there is no rule that says you can’t work at the same time. I worked full time while going to school full time, which allowed me to pay down part of my loans before they came due.
Even if that is not realistic for you, it might be easy to add in a 10-20 hour per week part-time job. Even at $10 per hour, that is an extra $400-$800 per month you can use to make early student loan payments, or avoid more debt all together. Earning extra money in college doesn’t have to be hard!
Pay Half Each Payday
Student loan terms generally have minimum monthly payments, but unlike a mortgage, there is nothing that prevents you from breaking that up into two payments. After all, most of us are paid every other week. If you are on that pay schedule, you can make 26 half payments per year.
If you do the math, you’ll notice that by doing that, you make an extra full payment each year. In addition to helping pay off your loan faster, any early payments you make lower your interest cost for the entire remainder of the loan.
Freelance on the Side
If you think freelancing is for “those people” with eccentric lifestyles or extra time or no “real job,” think again. Thousands of new freelancers are joining the ranks to make a little extra money on the side. That money can make a huge difference when paying off debt. It did for me!
There are tons of great ways to make money doing a little work on the side. You can try writing for websites, photography, or turning a hobby you love into income.
Take advantage of the numerous great sites to help get you started. Be sure to check out these ten sites to get ideas for breaking into freelance work in 2014.
Student Loan Forgiveness
This next option isn’t for everyone, it wasn’t for me, for example, but it certainly is worth looking into: in certain situations, you can have your federal student loan forgiven, canceled, or discharged. Just check this website to find out whether you qualify due to your job, disability, the closure of your school, or other circumstances.
Make Extra Money
Some people don’t want to do all of the work freelancing requires, but still want to earn a little cash on the side. There are tons of great ways to make money on the side with only a little effort on your part.
There are people like Mike Brown, who is renting cars on RelayRides to save money on transportation to instead pay off his student loans. Other people are using Lyft to drive people around their neighborhood in a taxi-like service to make cash. Others are selling their stuff on eBay and Craigslist, or renting out rooms or entire apartments on Airbnb. The opportunities are endless.