The 30-Something's Guide to Paying Off Student Debt
Take a look at this guide, designed for 30-something professionals who are looking for easier ways to pay off their loans.
If you've been paying student loans back for nearly a decade, you might be wondering if there's an easier way to get out of debt. Many students graduate expecting to hold their balances for decades, and there are parents today whose kids are going off to college while they're still repaying their own dues. Student loan debt may also be preventing you from reaching financial goals, but there are some ways you can take advantage of your age and experience. This guide is designed for 30-something professionals who are looking for easier ways to pay off their loans. If you are in this demographic, you might find that every tip isn't applicable to your situation, but you can still glean some inspiration from the advice.
Use Your Mortgage
If you are a homeowner, which we know is a long-standing dream for many, your mortgage might be even more valuable than you realize. One of the major perks of home ownership is access to additional funding when you need it. Taking out a home equity line of credit (HELOC) can help you pay off expenses, free up room in your personal budget and avoid borrowing more loans. Essentially, this line of credit increases the longer you own your house. The more you've paid off, the more funds you have access based on the value of your ownership percentage. You can read all about the steps to apply for an HELOC and weigh its pros and cons in a helpful online guide.
Refinance with a Private Lender
Student loan refinancing is one way to lower your monthly payments, although you will have to slightly extend the duration of your loan. There's a silver lining here, however. For those who are able to make their lower payments more easily, they may be able to pay off debt sooner. Refinancing can also be a way to create more flexibility in your budget, especially if you're trying to save up for other investments. When exploring private lenders, make sure you compare quotes and research each one extensively. Request estimates from at least three to four lenders before accepting any offer.
Snowball Your Other Debts
The snowball method of debt repayment shifts your focus from big bills to smaller ones. By paying off as many dues as you can in a short period, you free up more room in your budget. This allows you to pay off the bigger debts that are weighing you down faster. Another major reason to consider taking this approach to debt management is reduced interest. Many credit cards and small loans gather unnecessary interest because borrowers settle for paying the minimum. Although it may be convenient on a monthly basis, it could actually be costing you hundreds, if not thousands, in the long-run. For this strategy to work, you should first sit down and write out all of your outstanding debts. Organize them from the lowest amount to the highest. Make a plan to pay off at least one per month, or multiple if you can, so you can dedicate your extra expenses to repaying the bigger debts.