The Smart Way to Pay Off Student Loans

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Have fun? When you're burdened with the overpresence of student loans, then fun can come later. PAY OFF YOUR DEBT ASAP. I'm 33, single, living alone, and my fun consists of reading, Netflix, and PS3. I don't go out and I don't splurge, and right now I have a little over $9k left in total debt.
My friends call me a cheapskate, anti-social, and a hermit, but I'll happily assume those titles if it means lowering my debt to the point of non-existence. Remember, the borrower is slave to the lender. Remember the quote from The International:
"You control the debt, you control everything. You find this upsetting, yes? But this is the very essence of the banking industry, to make us all, whether we be nations or individuals, slaves to debt."

Yo of DC 11:45AM February 10, 2012

What a worthless piece of fluff this is. Did this really sell any books? Because there is no helpful information in this advertisement at all. 16 different loans and you expect people to take advice from you?

Marion Barrell of DC 2:32AM January 16, 2012

You won't necessarily pay a lower amount if you pay off early.
If you are eligible for the income based repayment program (IBR) your monthly payment is attached to your salary; 15% of what you make above 150% of the poverty level.
When you start figuring in what that payment is and project out to 25 years (any remaining balance will be forgiven after 25 years) and factor in an average of say 3% salary increase each year you can see what your total bill will be.
On a massive student loan, $200,000 for example, you will likely be better off not paying early because after 25 years you won't have paid back much more than the principal let alone the compounding interest on say a 7.5% consolidation loan. This is assuming you do qualify for the IBR.
Take a critical look at the factors involved with your debt: interest rate, your earning projections, balance owed and what payment and forgiveness programs you are eligible for.
Take whichever option will allow you to save more of your money into a retirement account. You don't want to get to age 65 and not have any money saved --even if you do have your student loan 'paid off'.

spingus of CA 2:15PM August 05, 2011

My fiancee and I are budgeting what it would take to pay down 35,000 in student debt. If we drag it out 10 years this 35,000 loan jumps to 51,000 in interest alone! We'd so much rather be on a tight budget for 3 years than pay into a money pit!

Lauren of TX 12:13PM July 22, 2011

At the end of the day, the quicker you pay off your debt, the more money you will save on interest. Now, if your interest rate is really low, less say, less than 5%, you can pay the minimum and invest the extra money and in this market easily earn over 5% interest on it...of course, you can loose money too. The surest way to make money on your money is to pay off debt.

gm of CA 3:13PM May 15, 2011

I think that graduates should be cautious before taking this advice. Especially if you have a large student loan debt. She should really be advising grads about saving, and paying down their debt, while trying to live within a budget. It's really about setting goals, and having self-discipline.

laura of MT 8:00PM February 24, 2011

Hi
Such a Nice Post.If any of Student looking for Loan for their studies then he/she can easily get from http://www.studentloansdebtconsolidation.net/

sajila wakas of OR 10:50AM January 31, 2011

Are you aware what you wrote? You are saving $20 a week for fun but paying only $10 a month on your student loan.....does this make sense to you?

Sarah Grotjan of WA 10:04AM September 20, 2010

My advice to avoid being weighed under large amounts of student debt, is not to go to the pricey private schools unless you have money that you don't have to pay back. Even with that kind of money, the rest that you will have to pay equals what you will pay at an equally good state school. Take advantage of state schools. They are not inferior. They are cheaper because they are subsidized by the state in which you reside. Comparison shop just like you would for anything else. Don't let "prestige" cloud your choice unless your parents are wealthy,you have a really great trust fund, or a pretty big scholarship.

gabesgram of DE 7:54PM June 29, 2010

Actually my student loan amount does not really frighten me in the least. About 60% is federal debt, and I consolidated all of those loans (except perkins) into a direct consolidation loan with income based repayment so I only pay 10 dollars a month. DO NOT CONSOLIDATE YOUR PERKINS! You lose any repayment or forgiveness associated with them. The other 40% that is private debt is painful every month, and I can pay it. But my credit cards will take A LOT longer to pay down.
Also Alphaconsumer, while the National Student Loan Data Services is awesome, it only tracks FEDERAL loans. So if Sallie Mae owns part of your soul, those loans won't be listed.
I think budgeting in fun is important, or else you're left with a massive splurge and buyer's regret. I will be socking away money to pay for my Orlando vacation this summer, but after that I think 20 dollars a week set aside in my brick and mortar bank will be ok for a weekly movie or whatnot

veronica of NH 4:00PM June 21, 2010