Get out of debt stories
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Debts from student loans are some of the most uncomfortable things in life. For college graduates who are within the 20 to 30 years age bracket, the situation is even more frightening. If you are in this group, you may find yourself drowning in the sea of debt.
Paying off your student debt is never an easy task; no thanks to the bleak financial profile of many millennials. So many of us don’t have a job and are living at home with debts. As at March 2018, outstanding student loan amounts to $1.14 trillion, with close to 17 million students in the 30 years age bracket holding a total amount of $383.8 billion in student loan. It becomes worse when you don’t have rich parents that can conveniently bail you out.
In spite of this entire negative outlook, some young men and women have overcome the burden of student loan debts and are living debt-free today. They did it while in school (some out of school) and without having rich parents. Here is how they did it.
Maintaining A Lower Cost Of Living
Katelin Anderbery, a 29 years old attorney said she was able to stay debt-free by keeping her cost of living down to a feasible level during her time in law school. She did it by working two part-time jobs. She started paying off her loans immediately the extra income was coming in, and never waited for the 6 months grace period to elapse before she started to pay.
Katelin’s goal was to pay off her loans (which have an interest rate of 6.8 and 7.9) before 5 years. Did she succeed? Yes, she did because much of her money wasn’t going into an extravagant lifestyle, but to her savings (saving about 40% of her income).
Katelin paid off her $87,000 student debt and became a loan debt-free student.
Making Advance Payment Via Interest Rate Margin
Danielle Desir, a 27-year-old grant specialist, is another excellent example of a student who never graduated from school with debt lurking in her financial shadows. While in school, Desir uses the strategy of always paying ahead of schedule. She took this step after calculating her interest rate, which happens to be $10 a day. By making regular and consistent payments, she was able to pay off her student loan debt within four years while in school. Desir signed up for an auto-pay option, which removes 0.25% of her interest, making it easier to pay off the debt.
You can start making an advance payment today by adding an extra $50-$100 on your due payment each month.
Tame Your Lifestyle And Commit Extra Funds To Debt Payment
One of the ways you can become a loan debt free student while in school or out of school is to channel whatever extra cash in a bonus or refund to your debt payment plan. Instead of moving out of your parent’s house, stay put, and substitute your rent for extra cash payment towards your debt.
Even if you want to move to your apartment, go cheaper, and avoid the high-cost neighborhoods. That would allow you to save on rent and divert more money to your debt.
Use Your Grace Period To Your Advantage
If your parents were super rich, you wouldn’t be looking for some window of opportunity to living a debt-free student life. But here is the catch: your creditor (the loan lender) usually gives you a period of grace after you stop attending or graduate from college. During this grace period, you will not be making any payment on your loan. You know what? Say no to the grace period (which could be up to six months, depending on the type of loan). Draw up a budget and include your grace period. Then start making payments on your grace period, as you would typically do for your due dates.
For example, if your student loan charge would be $200 after your grace period expires at the end of six months, start paying that amount now. By the time the grace period is over, you would have put the sum of $1200 ahead of your debt. Also, it would create in you the habit of always setting aside such money for your dent every month.
You can do this without your parents.
Debt is not a happy experience in any one’s life, and the situation is direr when your parents lack the finance to support you. But, with the above tips, you can become a loan debt free student and enjoy the rest of your life with no debts haunting your financial shadows.