7 Ways to Pay Off Student Loans Like a Pro

Do you know what the three scariest words are in the English language? Student Loan Debt! For something as frightening as this, millions of people are diving headfirst into this anxiety-inducing, stress-evoking, overwhelming money pit! But have no fear; solutions are here: ones that can help pay off student loans—or most any type of debt.

Many years ago, I started dating an amazing man, the kind of man a girl wants to marry (and marry I did). Along with all his super positive husband qualities came one unfortunate piece of baggage—a whole lot of student loan debt from four years at a private university (you can imagine the dollar amount that can create). But I said to myself, if that’s the only downside to marrying this man, I’m going to stick with him, and we’ll make it work.

So, fast forward about six years into our marriage (yes, only six years), and we became 100% student loan debt free! We’re living proof that you can pay off all your loans and even faster than the 30-year time frame the bank says it’ll take. The seemingly insurmountable debt haunting you like a ghost can disappear with a lot of hard work, some creativity, and unwavering commitment. No, it won’t be quick or easy, but it can (and will) happen. Let me tell you how!

1. Understand your loans.

Often when people take out student loans, they aren’t completely clear on what they’ve signed up for. A simple signature on a document can bring about a huge burden that lasts for years. So, go back to all that paperwork and read, read, read! Make sure you fully understand all the terms to which you’ve agreed. If you have questions about anything, never hesitate to call the institution that gave you the loan. After some research, we learned that if we set up automatic payments on one of our loans, they would lower our interest rate.

Also, look into loan forgiveness if you’re in certain careers. I’ve had friends who worked in a high-needs public school in exchange for their loans being paid and friends who worked in a mental healthcare facility whose loans were forgiven after working there a predetermined amount of time. Ask your workplace if this is something they offer.

Finally, see if your terms allow you to take a “non-interest-bearing grace period” before you start paying. For example, a couple of our loans allowed us to push off payments to a later date without accruing or compounding the interest. Therefore, we started paying off the loans that didn’t have grace periods first before moving on to the ones that could sit there without having to be paid yet. A little research and reading of your loan documents could shave off some of what you owe.

2. Be interested in more than the interest.

When you get your student loan bill each month, they love to show you the minimum payment you have to pay, which is usually just interest and very little principal (the face value of your loan). Don’t be fooled; you can pay any amount you want each month, and you want that amount to be higher than what they say it has to be.

The more money you pay during each statement cycle, the more goes to chomping down on that big principal amount, which in turn reduces the amount of interest you’ll pay over time. The smaller the principal amount, the less interest will accrue on top of that principal. So, don’t just pay that small amount they ask for, or you really will be paying off your loans for the next 30 years like they want you to.

3. Make that money.

This may seem obvious, but the more money you make, the more money you have to pay off those loans. So don’t just settle for a minimum wage job without any opportunities for growth. You’ve got a college degree now—put it to work. Even if you start at the bottom, put your best foot forward every day to earn a promotion. Move up the ladder in order to move up your income.

Don’t forget about a possible side hustle, too: babysitting, selling crafts on Etsy, or offering your skills to someone who’s willing to pay you to do something for them. Then take that extra money you’re making, and put it all toward the loans.

The seemingly insurmountable school debt haunting you like a ghost can disappear with a lot of hard work, some creativity, and unwavering commitment.

4. Budget is not a dirty word.

The money you work hard to earn every day is your money, so don’t waste it! Put it to work for you in the best way possible. Start by taking inventory of every penny you spend. You’ll soon realize the many places your money is going and that there are some things you can cut out (or at least decrease). After taking this inventory, set up a monthly budget of your bills and expenditures beginning with the absolute necessities, and no, mani-pedis, Netflix, and Starbucks are not necessities (though it’s okay to treat yourself occasionally).

A budget isn’t always fun at first, but trust me, once you realize how much money you can save to start putting toward your loans, you’ll become giddy happy about becoming debt-free.

After budgeting for necessities, then determine what you can put toward your loans each month. Do not wait until the end of the month when you have pennies left to make a loan payment. Paying off your debt needs to be a top budget priority every month. If you need assistance with creating your budget (and we did), I highly suggest recruiting some help.

We got connected with a wonderful couple who does financial counseling through Dave Ramsey’s organization. They were a godsend in helping us make (and stick to) a plan to knock out our loans and become fiscally sound. We created a budget with them and continued tweaking it over several months. You could also attend a class such as Dave Ramsey’s “Financial Peace University” to help with your overall financial goals beyond just paying off debt. There are even helpful (and easy) budgeting websites and apps such as Mint and EveryDollar. Utilize these resources; they will definitely assist you on your journey.

5. Coupons and discounts are your friends.

Before the need to pay off student loan debt arose, I always appreciated a good bargain. Paying full price was never my jam. But when we had to get serious about paying off my husband’s loans, I started learning how to seriously coupon. Even if you don’t get the Sunday paper, you can still print your own coupons from sites such as Coupons.com, Red Plum, and Smart Source. If you use a high capacity black and white toner printer, it barely costs a few pennies to print these coupons.

There are also great rebate apps such as Rakuten (Ebates), Ibotta, Checkout 51, and Fetch Rewards that give you money back on your purchases. Don’t forget to utilize store savings programs such as the Target app that you can stack with paper coupons and rebate apps to save even more money. Most grocery stores also have e-coupons you can clip on their app to save to your loyalty card or scan from your phone. Even most restaurants now have apps that offer savings.

Don’t forget to ask about available discounts on your insurance policies, hotel stays, and entertainment activities, and find promo codes for your online purchases using sites such as RetailMeNot or Honey. If there’s a discount to be had, use it! No, you don’t have to be an obnoxious penny-pincher or that crazy coupon lady who spends hours organizing her coupons into a binder and building a stockpile for the apocalypse. Just start small with one coupon, app, or discount at a time, and watch those prices (and your debt) go down!

6. Small changes make a big impact.

When it comes to saving as much money as possible so you can pay off those loans as soon as possible, start brainstorming every little thing you can do or change you can make to save a buck.

For instance, my husband and I took every measure to save on our utilities. That meant keeping the A/C on 80 degrees in the summer and the heat on 50 degrees in the winter. Yes, we sweated and shivered at times, but it made a big difference when our electric bill came due. Some people thought we were crazy, but who has the last laugh now that we’re debt-free?

With that, be cognizant of your power use in general; turn off those lights and unplug those electronics when you’re not using them. We even turned off the water heater when we didn’t need it. We scheduled showers, dishwasher, and laundry times to coincide so we could keep the water heater off for long stretches.

You also need to think of your water bill, too. Running water is literally pouring money down the drain. When you hand wash dishes, brush your teeth, and shave your legs, turn off the faucet! Every small change in how you use your utilities will save you money that you can then put toward those loans. (Here’s another great article with practical ways to save on your monthly bills: 5 Ways to Cut Your Monthly Bills.)

7. Be generous.

You may be wondering what this has to do with getting out of debt, but trust me, it’s critical. Oftentimes when we feel strapped for cash, we want to hold our money even tighter thinking there’s no way we can afford to be generous toward others. But that’s simply not true. Whether you call it “good karma,” “paying it forward,” or “God’s favor,” giving to others often comes back as an extra blessing to us.

Now, I’m not saying that you should donate money in hopes of getting it back two-fold because that is the wrong motivation. There should be no selfishness in giving! But from experience, I know that when we open our hearts and our wallets to those in need, we somehow get a richer blessing in return; not just that warm, fuzzy feeling when you help others, but many times an unexpected financial gift comes your way in return for your generosity. So, don’t be a Scrooge; put others before yourself.

It’s Difficult to Pay Off Student Loans, But Worth It

Paying off student loans (or any debt for that matter) is not a cakewalk and takes a lot of hard work. You have to stay committed and be willing to make sacrifices (a lot of sacrifices). It’s the only way to get out from under the burdensome task of paying back the money you owe.

When you feel discouraged and think there’s no end in sight, look back at what you’ve already paid off. Even write it out, and stick it on your fridge as a motivator. Or make a fun poster of a thermometer or a mountain showing the total you owe at the top and moving up higher and higher as you make a payment each month. Remind yourself that you’re better off than when you started, and it’s only up from here. Go forth, and become debt-free!

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For more on saving money and spending wisely, check out this podcast episode from This Grit and Grace Life: Know Yourself, Know Your Money With Rachel Cruze – 153