How To Overcome The Pains Of Student Loan Debt

It is true that student loan debt in America has mounted to $1.3 trillion and rising. This is more than both car loan debt and credit card debt. The Federal Reserve Board Survey of Consumer Finances states that almost 5.6 percent of borrowers owe more than $100,000 and over 19 percent, $50,000 or more in student loans.

But, the stark reality is there is hardly any alternative for students than to take a student loan, if they hope to get a better paying job in their chosen field. However, the repayment pain can be eased, if students know how to repay the debt.

Live frugally and pay down quickly

If you are buried under a student loan and think that your job can help pay it back, you may be in for a rude shock. More often than not, the pay is not sufficient enough to sustain yourself and pay back the loan. This requires self-discipline, sacrifice and frugal living.

Some steps to frugal living:

#1 Become extremely frugal

Start out with a spending ban on all non-essential items and even on outings with family and friends. Grab whatever comes for free, such as doing fun things instead of going for the movies, going for walks, instead of joining a gym, shopping at cheap stores, such as Walmart and The Dollar Store, and using coupons and money saving apps.

#2 Save on paying for accommodation

Although many of you may not approve of it, it works out cheaper to live with parents or in-laws, instead of renting an apartment.

#3 Use old car

A new car translates into spending big money. It is better to make do with your old car and keep it in working condition as long as you can or till you can repay your debt. If buying a car becomes a necessity, go in for a used car.

Get a side hustle

Since, your job is not enough to pay off the student debt, find ways to make extra money on the side. For this, develop skills that you have aptitude for. You can make a neat packet as a freelancer or part-timer.

Refinance your student loans

The advantage of refinancing your student loans is that it allows you to consolidate your existing private and federal student loans into a new, single student loan. This loan invariably comes with a lower interest rate. This means that you will have to make lower monthly payments and be in a position to repay more student loan debt, save or invest.

To be eligible for refinancing, you need to have a favorable credit score, should be employed, have sufficient income to repay the student loan, and should preferably not have other debts. Source

Conclusion

Student loan debt is a burden that needs to be taken seriously. You can achieve full repayment without inconveniencing yourself, if you make student loan repayment your first priority, over everything else. Frugality, extra income, refinancing the loan, etc. will go a long way in easing the pains of student loan debt.