So…since that whole student loan forgiveness thing didn’t end up working out. You’re back to paying them off yourself, feeling like you’re not making any progress. But rather than continue to make payments for the next 25 years before they’re finally forgiven… [and only to get hit with a giant surprise tax bomb after the fact.💣] You decide to steal our strategy, pay off student loans ASAP and move the heck on with your life!
Wonderful! We couldn’t be more excited for you! Now here’s whatchurgonnawannado.
Pay off Student Loans Using a Modified Snowball
If you’re one of the few people committed to getting out of student loan debt no matter what! Then this is about to completely change and improve your approach. This is the exact strategy we used to pay off ≅ $37,000 of student loan debt in 12-months!
Most student loan borrowers don’t know this…
Most of the people we talk to about their student loans, look at their debt as one total balance. When in fact the total amount of student loans you borrowed, is made up of multiple, smaller loans. Some subsidized, some unsubsidized. Each with a different balance and even different interest rates. When we realized this ourselves, it was a total game changer!
That’s because, rather than paying a little extra each month to the total balance. 🙅
We realized that we should be treating our student loans, the same way we were treating our other debts. Instead of looking at the total balance of our student loans, we broke it down.Paying off each individual student loan using our version of a debt snowball. That meant when we did pay extra, rather than have it go to the total balance, we made an additional payment specifically on the loan we were paying off at that point in our snowball.
This helped us put more money toward the principal of the individual loan, which got us out of debt ASAP! We continued this strategy until the day came that Dylan finally made the last payment on his student loans and we reached our goal of Debt Freedom!
MORE WAYS TO IMPROVE YOUR FINANCES!
Check out the Cash Flow Freedom Framework – Break the paycheck to paycheck cycle and start paying off debt fast!
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This blog is based on an episode of the radmoney podcast on the same topic. Catch up on recent episodes of the radmoney finance podcast and make sure you never miss an episode by subscribing on Spotify – Apple or wherever you listen to podcasts!