Congratulations on graduating college and landing your first real job! But between tossing your cap and receiving your first paycheck, a harsh reality sets in: it’s time to start paying back those student loans. The average student graduates with over $30,000 in student loan debt, and paying that off is no small feat.
However, you don’t have to approach those monthly bills with dread. With some smart strategies and careful planning, you can pay down that balance faster than you think. In this guide, we’ll walk you through the best ways to pay off student loans quickly so you can say goodbye to debt and hello to financial freedom.
Boost Your Finances with a Side Hustle
To speed up repayment, consider starting a side hustle to earn extra money each month. Here are some ideas:
OnlyFans
An increasingly common way for students to earn side income is creating content for OnlyFans, a subscription-based social media platform. You can charge fans a monthly fee for access to photos, videos, live streams, and more. While controversial (since most people think it’s a platform for adult and OnlyFans search engine content), some students report making over $1,000 per month through OnlyFans while creating in various niches like makeup, traveling, lifestyle, and cosplay. Keep in mind the potential ethical and privacy issues with this option.
Tutor Local Students
If you’re particularly skilled in certain subjects, consider tutoring students in your area. You can charge $20-50 per hour helping students study math, science, English, or other topics. Market your services on neighborhood Facebook groups, at local schools, and on websites like Chegg Tutors or Wyzant. Build up a base of clients, and you’ll have a steady side hustle.
Start a YouTube Channel
Creating video content for YouTube is a popular way for students to generate extra money. You can start a channel focused on your hobbies, areas of expertise, or interests. As your channel gains views and subscribers, you can make money through ads, sponsorships, and product placements. While it may take time to build up, some YouTubers make over $100,000 per year.
Smart Strategies to Pay Off Student Loans Quickly
Make Extra Payments
Just paying the minimum due each month will cost you thousands in interest over the life of the loan. Adding an extra $50 to $100 per month can shave months or even years off your repayment time. Set up automatic payments for the extra amount so you never miss it. It’s a small change that can make a big difference.
Focus on Paying Interest First
If your loans have accumulated a lot of interest, prioritize paying off that interest first. This ensures your payments start chipping away at the principal balance, which can save you money in the long run. You want to reduce the amount on which future interest is calculated.
Managing Loans While Building Your Career
As you start your career, your student loan payments can feel like a heavy burden each month. Fortunately, there are strategies to make repayment more manageable while still paying down your loans efficiently.
Start with an Income-Driven Plan
If your payments feel overwhelming, consider an income-driven repayment plan. These plans cap your monthly payments at a percentage of your income and extend the repayment term. Although you’ll pay more interest over time, it can provide relief when money is tight. As your salary increases, you can switch to a more aggressive repayment plan.
Make Extra Payments When Possible
Whenever you have extra money from a bonus, tax refund, or side gig, put it toward your student loans. Even small lump-sum payments can make a big difference by reducing your principal and shortening the loan term. Automate additional payments through your loan servicer’s website for an easy way to pay more each month.
Keep Loans in Grace Period
New graduates typically have a six-month grace period before student loan payments are due. If possible, keep federal student loans in their grace period while you job hunt. Payments can be deferred for up to three years during periods of unemployment or economic hardship. Private student loans typically offer a shorter grace period, so you’ll need to contact your lenders directly to request a payment pause.
Pay Off Debts Faster
The key to paying off student loans faster is to get strategic with your payments. Start by figuring out your budget and where you can trim expenses to find extra money for your loans each month. Then, target your highest interest rate loans first, paying as much extra as you can towards them.
Consider refinancing or consolidating loans to get a lower interest rate. Keep up with payments and avoid deferments to pay down the principal faster. With focus and discipline, you can knock out student loans more quickly than just making minimum payments. Stay motivated by tracking your progress and celebrating milestones. You’ve got this!
