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Best method to pay off student loans?

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Anonymous
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Re: Best method to pay off student loans?

Hope no one minds a new member jumping into the frame!

 

Being a current grad (as of December 2014), I also am very interested in what others have done to take care of the loans hanging over their heads. I know I have 6 months until I am required to make payments (picked the "Graduated" repayment plan) and am hoping that I educate myself enough to make the right decisions financially from here on out.

 

I was discussing with my brother earlier, would it be wise to make some small payments now (before the 6-month grace period is over)? I'm thinking I should first get an emergency cash fund in place before making big financial moves... Apologies, but I truly am quite new to this aspect of my life. It's all about making the first step right? Please help!

 

 

Message 11 of 14

Re: Best method to pay off student loans?

Alright, great news, DR's book worked to help knock out my student loans without having to consolidate anything. Last year I had 3 student loans between 5.75-6.5% interest, totaling $23,000. Sign up for direct debit and see if they will knock off some interest rates like myfedloans does. Complete DR's step 1, then create a budget (I use Mint and love it), then pay down loans with the highest interest rates first (not smallest balances). Today I only have 2 loans totalling $9000 and it will be paid in two months max (I'm using my entire tax return to help pay it down) and I have an emergency fund that I'm still funding.
The most important parts tips are creating a solid budget, really sticking to it, still live your life, and snowball away.
Once it's paid off, I'll use the same monthly loan payments towards my 401. You can do it! Good luck!
Message 12 of 14

Re: Best method to pay off student loans?

By the way, paying down my student loans have not lowered my credit score...if anything, it's improved from low 600s to just over 700. Just keep the debt under control and do not miss any payments, and you should be fine.
Message 13 of 14
Anonymous
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Re: Best method to pay off student loans?


@suzyloveskoalas wrote:
Alright, great news, DR's book worked to help knock out my student loans without having to consolidate anything. Last year I had 3 student loans between 5.75-6.5% interest, totaling $23,000. Sign up for direct debit and see if they will knock off some interest rates like myfedloans does. Complete DR's step 1, then create a budget (I use Mint and love it), then pay down loans with the highest interest rates first (not smallest balances). Today I only have 2 loans totalling $9000 and it will be paid in two months max (I'm using my entire tax return to help pay it down) and I have an emergency fund that I'm still funding.
The most important parts tips are creating a solid budget, really sticking to it, still live your life, and snowball away.
Once it's paid off, I'll use the same monthly loan payments towards my 401. You can do it! Good luck!

Congrats on paying off your SL using DR's Snowball Effect. Sticking to a budget is a major factoring in achieving financial freedom. Good luck on paying off yur last 2 loans!! Good luck on building your 401k!!!

Message 14 of 14
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