How To Pay Off Student Loans In Less Than A Year

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There are millions of Americans out there struggling with extreme student loan debt. Everyone is pressured into going to college these days and quite frankly, it costs a fortune. Graduates are faced with the looming payback period and don’t really understand just how much it can influence their personal finances.

I have personally paid off all of my loans, and have come up with a guide to pay off student loans in less than a year. If you want to learn how to live debt free, and do it as soon as possible, keep reading.

I managed to take care of all my loans and you can too.

The Effects Of Student Loans

Student loans can really take a toll on you if you aren’t careful. Student loan debt across the nation is, according to Mark Kantrowitz editor at FinAid, growing at a rate of $3,000 per second.

While in college a large majority of people forget about their loans completely. They see a check come in and take care of their tuition but are not conscious of the total amount of the loans that is perpetuating until they suddenly have to pay them back.

I have seen so many friends go to school for 4-5 years, take out the maximum allowable on student loans, and be stuck with $50-100k worth of debt upon graduation. This can be overwhelming depending on the average salary for your major.

Would you invest in a house that is guaranteed to be worth less immediately after you buy it? No. So why would you invest in an education paying out a ton in loans that isn’t worth it from a salary standpoint when you finish.

Most graduates these days don’t even manage to find a stable, well-paying job right after school. I know you might be thinking, what about the grace period? Well, 6 months is hardly a grace period, especially when some of those loans are still racking up interest behind the scenes.

If you really think about how much student loan debt you are in, it is probably enough for a down payment on a house, or enough to pay cash for a nice car. Wouldn’t it be nice to be a millennial, or any age and be able to actually own the place you live in?

The harsh reality is, student loan debt can actually ruin your chances at ever buying a home.

This is not because they tear down your credit, but because even $60k worth of student loans can add up to a $500-1000 payment per month depending on what you earn. In some states, this is a mortgage.

If you do use the pay as you earn option that many lenders allow, you will just be stuck paying more interest on those loans as time goes on.

Granted, refinancing options are available, but when I tried to refinance through SoFi I was given a rate that turned out to be the average of the rates I had initially had for each individual loan.

This doesn’t make sense as now I’m just consolidating multiple loans into one giant loan with the same crappy rate. Then the pay as you earn option flies right out the window.

One key concern that should be brought up when discussing potential loan consolidation options is that you are then removed from any potential forgiveness programs, or PAYE (Pay As You Earn Programs).

Although these programs might not be the most lucrative in terms of interest… there are some other benefits to them.

These programs are important because they allow you to lower your overall payment month to month and help you tackle individual loans ultimately using the methods outlined in this article without being burdened by too giant of a payment.

Any extra payment you make during this period is counted as overpayment and reduces your timeline to payoff which is the ultimate goal.

It should be noted that, sometimes these personal loans can be tied to some form of collateral. Ultimately, your 401k, home, car, whatever you use to pledge your allegiance to paying off this loan can be at risk.

Having these loans, both your traditional federal student loans and any potential consolidation or personal loan you take out can really hinder your long term movement towards generational wealth.

You’re probably feeling a bit overwhelmed by all the bad surrounding student loans, but that’s okay.

All the negative effects of student loans aside, there is a way to pay them all off and you can even do it very quickly.

I didn’t say this was going to be pretty, but if you take care of the evil veil of debt now, you will never have to worry about it again.

Steps To Pay Off Your Debt

1.Pay while in school. This one is the hardest for people, and you are likely taking out loans to afford school in the first place. However, if you have excess after your loans get paid out, or you make enough working part time that you can pay towards your loans.

Do it now! The future you will thank you. I made the mistake of not doing this. While I managed to pay off my loans in less than one year it was much more painful because I didn’t pay towards them while still in school.

2.Live below your means. You will likely have just graduated and see a huge pay increase from working down the street at the local deli for minimum wage. This doesn’t mean you can forget about your loan payments coming down the line.

Don’t inflate your lifestyle. Live in the same place, drive the same car, and eat like you are a broke college student for just a while longer. Don’t plan the expensive trip out of the country to go backpacking and gallivanting all over. You can do that AFTER you pay off your debts. Oh and quit buying clothes you don’t need.

In addition, stop hitting the bar every single weekend. If you step back and tally up how much you spend on alcohol each weekend, you will be horrified. This is the first thing I did and I cut my drinking to almost zero.

3.Create a plan. You need to know exactly what the maximum amount of money you can afford to pay on your loans per month is. I quadrupled my minimum payment on my $65k debt and paid directly to the principle balance with any excess.

I lived in an apartment well below my means with roommates for my first year. This allowed me to spend whatever I could actually afford for rent on  my loans.

However, I couldn’t do this without a plan. I had a strict budget that I had worked out, and I used multiple apps to keep track of my minimum expenditures. Mint and HelloWallet are both solid choices to download for budgeting.

4.Pay off the largest interest loan first. This has become commonly referred to as the Avalanche Method. As you begin to pay down loans interest can still stack up very quickly on any larger loans you have. If you get rid of these larger, high interest loans right off the bat, the accruals from the smaller, low interest loans will not cause you to drown.

Once you pay off the highest interest loan, go to the next highest and pay that off, but still pay the total amount you designated in your planning session above. To clarify, still pay the minimum on every single loan, just pay the excess to the principle balance on the highest interest loans.

5.Lump sums go to loans. This one is probably the hardest to stick to. I came into decent amounts of money randomly in returned security deposits that I had essentially forgotten about, large tax returns, and small bonuses at work.

Any time you receive a lump sum like this that you were not expecting, put it directly towards your debt. This money was not necessary, and usually you wouldn’t have thought twice if you didn’t have it. Pretend it never happened and knock down some debt with it.

I took my $12,000 tax return and applied it straight to multiple loans. It paid off 3/11 loans right then and there. Christmas bonus, same thing, paid off loans. Keep doing this and you’ll be shocked at the impact it will make on repayment.

6.Stick to it. One of the biggest problems with aggressively attempting to pay down your student loans is the fact that it doesn’t feel good. Sometimes you have to do things that don’t feel good in order to see the reward later. The light at the end of the tunnel is there let me tell you. You just have to keep moving towards it.

If you stop paying on your loans or drop back to the minimum you will quickly realize that the interest will once again catch up with you. There are many spreadsheets out there that can actually help you knock out these loans using my above method with little to no Excel experience.

Final Thoughts…

I have knocked out my own student loan debt and I am now saving to pay cash for a home using the same method. The fact of the matter is, if you are willing to do this for just one year in order to pay off your debt, why not stay hard at it for 2-3 in order to better setup your life for the future.

It’s not easy to be an entrepreneur, work a full time job, and focus on paying off all your debts. But let me tell you, it can be done and you will be a much happier person with much less stress because of it.

If you are stuck in limbo between jobs, this is the best time to pursue an online marketing career to supplement your future income. My personal favorite route to success is Wealthy Affiliate.

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6 thoughts on “How To Pay Off Student Loans In Less Than A Year”

  1. I wish I had thought of paying down my student loan while I was still in school. My loans aren’t a huge amount, but it’s still a significant amount that I have to make sure I don’t default on. It’s also difficult to do lump sum payments on it because I made a rookie mistake of buying a new car when I got my first job out of university. -.-‘ Now I have two debts to pay down at the same time.

    You provided great tips and it’s great that you’d also been able to KO your student loans! Thanks for sharing!

    1. Ahhh Krystle that’s rough to hear! I unfortunately was working and spread a bit too thin to focus on my loans so I totally understand where you are coming from.

      The new car is definitely one of the biggest temptations. Although you didn’t manage to avoid it, it’s probably only a 60 month loan so you should have it paid off relatively quickly. Then you can take what you were paying on the car and push it towards your loans!

      Glad the post helped you out a bit.

      Thanks for reading,

  2. Very inspiring that you were able to pay off your loan so quickly. I’m lucky that mine are in the public service loan forgiveness program…although there’s been some uncertainty about whether that will survive the current administration. If so, I am gonna have to follow your lead to blast out my considerable debt from grad school- thanks for the blueprint.

    1. Hi Penny,

      Glad this inspired you. That is super lucky! Good call going into a field that offers that. I wish I would have had the same idea back then but unfortunately I didn’t. If the program does get axed this should work for you pretty well!

      Good luck,


    1. Hi Mauricio,

      This is definitely not meant to discourage you from working towards your degree. I have mine and it has done wonders for me. It really just is important that you start paying these puppies down as soon as possible. Especially if you have a little bit of extra cash while in school. You will thank yourself in the future, trust me!


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