Getting a college degree is a great idea, but it’s not always easy to pay off your student loans — especially at first.
For many college grads, it takes a couple of years before they make enough money to comfortably pay off student loans and other bills without feeling financial strain. That’s normal, but because it’s tough to see spare cash vanish in the name of student loans, some grads decide to kick those loan payments down the road.
That’s never a good idea! In fact, you should never let your student loans lie because it could ruin your credit and cause you to pay more in the long term. Let’s take a quick look at how you can pay off your student loans even if you have a limited income.
1. Set up a loan repayment plan
First, take a look at how much you have left to pay off your student loans and how much you make every month. Subtract all the money you need to spend to pay for bills, food, and so on.
Anything left? Good! You can use some or all of that to start paying off your loans with a consistent repayment plan.
A loan repayment plan is the best way to pay off your student loans even if you have a limited income. For the best results, set up your bank account to make automatic payments to your student loans with each paycheck.
Do this and your student loans will become just another bill you don’t have to think about.
Use a debt snowball calculator
If you have multiple student loans to different lenders, like a federal student loan, a loan for books, and more, see how a debt snowball calculator can help you pay off your loans more quickly.
A debt snowball calculator helps you completely pay off the smallest debts under your name ASAP. Once you’ve done that, you can start paying off the bigger loans without the smaller debts accruing interest.
2. Consider refinancing, if possible
You might be able to refinance multiple student loans into a single loan with just one interest rate instead of several. However, you’ll need good credit to qualify for many of the best refinancing loans, so this option might not be for everyone.
3. Embrace frugality and start saving
Everyone can be a little more frugal and start saving as much as possible. One of the best ways to save a little extra cash is to not eat out as much. Make yourself healthy meals at home and you might just save yourself hundreds of dollars per month.
4. Use ‘found’ money for loan repayment
Last but not least, pay off your student loans with your limited income by using any “found” money for your debts. Found money can be any money you didn’t include in your initial repayment plan, like a raise at work, some cash from grandma for your birthday, or anything else.
Remember, the sooner you pay off your student loans, the sooner you’ll have more money in the bank for fun stuff.