Student loan debt is something that many students have, but no one wants to worry about. Unfortunately, many of the students who graduated in 2015 had an average student loan debt of $35,000. This is a LOT of money. In fact, many students have not even had the opportunity to make that much money in their life or career yet.
While the amount of debt continues to grow, students are looking for ways to pay it down, but sometimes it feels like an endless battle. With interest rates where they are, if you were to extend your loan term for the full 25 years, you would pay about as much in interest as your loan is worth, which means it is double.
If you find that you are unmotivated to pay off your debt or you are struggling to find motivation, we will help provide you with some helpful tips below. You CANNOT let student loan debt crush you because if it does, you may find it extremely difficult to climb out of.
Okay, let’s take a look at how you can stay motivated.
1. Get Pissed Off at Your Debt
One of the first motivators to pay off your debt is to get pissed off at it – angry at it. To stop the fuel of ate toward your debt, you will pay it down.
In fact, many people, if they know the truth, will HATE their debt and get MAD at it. How do we know this? Okay, go get one of your credit card statements right now and place it in front of you on the table.
Now, look at your minimum payment and look at how much of that is going towards interest on the debt you owe. Let’s say for example that you are supposed to pay $200 per month and $150 of it goes toward interest payments. Your debt is supposed to be paid off in 10 years.
What’s the math on this? Let’s see. 10 years is 120 payments times the $150 and you have a total of $18,000 paid in interest on the credit card. YIKES! The same goes for your student loans. You can use student loan calculators and find out just how much you will pay in interest over the course of the loan term.
Now you see why getting mad at your debt can help you pay it off quicker.
2. Think of Your Long-Term Goals
Do you have any long-term goals? Of course you do. Maybe you want to purchase a car or maybe you want to have kids and purchase a nice waterfront home. These long-term goals will fuel your motivation to pay off your debt.
Why? Because if you have debt, you cannot get these things. In fact, when you have too much debt, you will find that it is nearly impossible to have a loan financed.
Your debt to income ratio plays a major role, so the faster you get rid of debt, the more likely it is that you will be able to finance and achieve your long-term goals.
3. Set Small, Achievable, and Realistic Goals
When you set goals for yourself, it is important that you make them realistic. For example, it is unlikely that you can set a goal to pay of $50,000 in debt in one year and then purchase a house two months later. It just isn’t feasible.
When you make goals for yourself, you want them to be realistic and you want them to make sense and be attainable. For instance, your goal may be that you want to save $1,000 by year end and pay off two of your credit cards that each have a debt of $500. This is realistic and a goal that you can work towards without burning out of losing motivation.
4. Choose the Smallest Balance or the Highest Interest FIRST
The easiest way to help yourself stay motivated is to actually SEE progress. Therefore, you should pay down one debt at a time. The best way to pick which debt to pay down is to either start with the smallest balance or start with the student loan that has the highest interest rate.
Once you get this first debt paid down, you will feel like you accomplished something and you will want to keep it up. Simply keep tackling your debt one by one until you no longer have any debt to clear away.
5. Consider Refinancing Your Student Loans
If you have student loan debt with an interest rate between six and eight percent, you should consider looking into some of the best student loan refinance companies. The reason behind this is because you can receive a much lower interest rate, sometimes as low as two percent, but often about four percent.
The way refinancing works is by taking your current loans and paying them off and creating a new loan under the lender. This often results in a lower monthly payment and lower interest rate. You can also shorten, extend, or keep your loan term where it is.
In fact, students who do refinance their student loans can save thousands of dollars over the course of their loan and hundreds each month.
6. Reward Yourself When You Reach Goals
The last way to stay motivated is to not forget about yourself either. While you will have to sacrifice and budget to make sure you can pay off your debt, you deserve something for all of your hard work. You should always reward yourself when you reach a milestone or when you pay off a debt. This will allow you to have something to look forward to and you will not feel like you are simply working to pay off your student loan debt.
If you are having trouble staying motivate when it comes to paying off your student loan debt, take a look at the six ways and tips above. We believe that each one will help keep you motivated and on track toward your goal.
Author: Jeff Gitlen
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