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How to Pay off Student Loans Early (Without Trying Too Hard)

How to Pay off Student Loans Early (Without Trying Too Hard)

Student loan debt has now reached an epic all-time high, which is why the US government is finally cracking down on students that do not repay their student debts. You may be paying yours off, but is there a way to get it done quicker with a little less pain?

Can Students Avoid Paying Back Their Student Loans?

An old trick was to avoid your debt company for thirty years and they would write off your debt, but that trick isn’t possible anymore. There is nowhere you can hide where your credit company will not find you. In any case, if you do not keep your student-loan repayments up, then your credit score becomes so bad that you won’t be able to rent a place or even have a bank account.

A common trick is to move abroad. There are literally millions of students coming from Pakistan, Afghanistan and Mexico to get a degree, and then move back to their own country to avoid repaying the debt. Another common trick is for US students to get into student-loan debt and then move abroad to avoid repaying their loans.

Due to the fact that student debt has now reached over 1 trillion dollars, the US government is starting to panic. They have reached agreements with Europe, Canada, Australia, New Zealand, and a few of the NATO member countries where they are allowed to recoup student debts from people that move to those countries. Another change is via increased prosecutions, where students that return back to the US after not paying their student debts are arrested.

The Trick Is To Pay A Little Extra

If you want to pay off your student loans a little quicker, then you need to pay a little bit extra every month. You need to maintain your current direct debit with the currently agreed amount, and then you need to make adhoc payments to your student loan company.

Some Students Round Their Numbers

This sounds like a dumb idea, but you would be surprised at how many ex-students do it. When they go online to pay their bills, they often have an odd number in their account. To round it off, they give a little to their student loan company.

For example, if you have $566.73 in your account, and you pay your water bill at $78.50, you are left with $488.23. Some people, while still on their Internet banking screen, will pay $8.23 onto their student loan account. It leaves them with a nice round $480. Try it yourself, it is oddly satisfying, and those small amounts every now and again really add up.

Have Two Direct Debits From Your Account

Some students pay off their student debts earlier almost by tricking themselves. They have two direct debits taken out of their account. The first amount is drawn out on the same day as their rent. That way, they know how much they have to have in their account for a certain day. The other direct debit comes out on the day they are paid from work.

A small amount is direct debited out of their account on the same day they are paid. It is almost as if the money that has been paid never really existed. It is not missed because it is not seen.

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Try Using Credit Card Rewards

There are some credit card companies that will send you money if you spend a certain amount. Usually in the US, you have to spend a certain amount within thirty or ninety days. The amount varies, but it is usually between $1000 and $3000.

Obviously, if you are prepared to spend $3000 on your credit card, then you could just as easily put that $3000 on your student loans and forget the credit card awards. So, how do credit card awards help you pay off your student loans earlier?

What you do is spend the money you were going to spend already on your credit card. For example, instead of having all of your bills come out of your bank account, you could have them come out of your credit card. For all of your expenses, such as food shopping, presents, etc, you use your credit card. At the end of the month, you repay your credit card with the money in your bank. Here is an example of how it may work if you get an award of $40 for every $2000 you spend.

You have $2000 in your bank account

  • You pay your utilities with your credit card, which costs $377.
  • You pay your rent, which costs $660.
  • You pay your other bills such as phone contract, which costs $75.
  • You pay for a month’s worth of food and household goods, which costs $420.
  • You pay for going out, clothes, and other expenses, which costs $368.
  • You pay for presents that you buy online, which cost $100.

At this point, you are $2000 in debt on your credit card. You move the money from your bank account over to your credit card and pay off the balance. You then receive your $40 award from the credit card company that you put towards your student loans.

Gambling Your Way Out Of Debt

You shouldn’t try to gamble your way out of debt because it never works. However, you may like to try investing just a little money into gambling every month and paying the winnings into your student debt. At the end of every month, you take a set amount from your wages and gamble it.

You only do it once per month, and you only spend a certain amount of money. For example, at the end of the month when you are paid, you take $50 from your wages and make two bets at $25 each. If the bets win, you put that money towards your student loans. If the bets lose, then you try again next month.

The benefits of this are that if you are lucky one month, you may be able to pay off your debts earlier. The downside is that you may lose $50 every month. The other downside is that you need a fair amount of discipline to pull it off. Many people will be tempted to keep on gambling after winning, to deposit more money, or to play again with the money they won. If you are able to only make two bets per month, and to withdraw the winnings (no matter how big or small), then this method may help you pay off your student loans a little quicker without trying too hard.

About The Author

Ben Todd

Ben was a seriously broke graduate student with bad credit who after finding himself rejected for any sort of credit card or loan for most of his adult life, finally decided to get his financial life in order. 'He spent several years reading as many financial advice books and blogs as he could.And suprisingly, Ben found he actually LIKED the topic of personal finance; after fixing his own finances, starting his own successful work at home website business, and using his earnings to get out of debt, created echeck.org to help others do likewise!

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