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What did it feel like to finally pay off your student loan? Any tips or tricks?

I’ve heard it’s better to pay off in big chunks, but I’ve also heard it’s better to make more frequent small payments.  I’ve also heard it’s better to use my credit card and get points.  What’s really the best way?  Also, any motivation on how it felt to make that last payment would be awesome!

17 Comments
Visitor I

What did it feel like to finally pay off your student loan? Any tips or tricks?

The best approach to debt is to never have it in the first place. Live within your means. I paid off my loans as quickly as possible. Whenever I got some extra cash, went to a bigger loan payment. Losing money on interest never seemed like a good thing to me. It felt like a rock that was tied around my neck had been cut loose.
Visitor I

What did it feel like to finally pay off your student loan? Any tips or tricks?

Well, it feels amazing and like a burden just been lifted off your back!!! I payed two college loans slowly, but consistently made monthly payments over 10 years or so. I owed 21,000 for one loan and 3,000 for the other. The smaller loan I payed off first and increased monthly payments closer too payoff of the loan. I did the same with the larger loan as well, and I only deffered my loan payments until I started working after college. Just be consistent and don't miss any payments, and apply extra income tax money when you can afford too. Hope this is helpfull for you..
MKM
Visitor I

What did it feel like to finally pay off your student loan? Any tips or tricks?

It felt great to pay it off in 11 years instead of 30. Never deferred payments, while in school, paid interest plus small amount of principal. After graduation, consolidated all loans, paid more on higher interest first, any monetary gift received for Holidays was applied to loans.
Visitor I

What did it feel like to finally pay off your student loan? Any tips or tricks?

It felt great! I would not use a credit card. You may get points but you’ll also pay higher interest rates. I would make payments according to income. Before I was married I made small payments and even deferred interest for awhile. Once I got married I had more income and would add an additional $100 or so to each payment and any bonuses made at work would be used for paying it off. I of course paid off my credit card debt first due to the interest rates. Then moved to the student loans.
Visitor I

What did it feel like to finally pay off your student loan? Any tips or tricks?

Unfortunately there is no one one size fits all answer to THE BEST way to pay your student loans. A large part of your plan is dependent on your goal. If you are working on building your credit, one of the factors in your credit score is the age of your accounts. Student loans typically stick around for a while, and as long as you are making consistent payments show you are maintaining an account in good standing for a sustained period of time. Paying attention to the interest rates is key in establishing your debt pay down plan. By targeting the highest interest rates first and putting as much energy towards paying those down first you end up paying less in the long term. Be careful with using credit cards, as it’s tempting to just move debt from one place to the other. Points/miles are great if you pay the balance off immediately. If not, you’ve just moved your debt to a higher interest rate and cost yourself more money.

Becoming debt free is a great thing to do. Take some time to look at your long term goals, analyze your current financial options and figure out which approach actually works best for your situation. Good luck!
Visitor I

What did it feel like to finally pay off your student loan? Any tips or tricks?

It felt AMAZING! I was $27500 in the hole once I earned my undergraduate degree, and I spent most of my extra money to pay down my loan debt--it took about 3 years, but I was able to save back about $750-1000 per month to put towards the balance. I did a couple of things to help achieve this so quickly:

1. I enrolled back in school part-time so that my subsidized loans stopped accruing interest, and still made my typical monthly payments. This was a bit easier for me than most since I got a job out of college at a large university, and was able to take classes part-time cheaply.
2. I joined the Army National Guard to assist with supplemental income; they do have programs like SLRP which you can get on an enlistment contract that will pay back your loans for you to a certain amount.

3. I would pay off entire amounts in chunks. On top of the monthly payment, I would save up $3-5k in a separate savings account and then make several large payments at once.
4. I lived with my partner out of college and we both shared a one bedroom apartment which was $800 monthly and included all utilities--this is a steal where we live!

I wouldn't recommend using credit cards to pay this! Just open a dedicate checking account that part of your paycheck deposits into automatically, and then use that to make the large payments. Trust me, it's a great feeling, and it's awesome to see your personal debt-to-income ratio take a drop so that you can look into home buying and other credit-based options! You can do it! :-)

Visitor I

What did it feel like to finally pay off your student loan? Any tips or tricks?

Paying off the student loan was like a rock had been lifted off my shoulders. I would never use a credit card to pay off a student loan. I don't care how many points there are. The interest rate can go up, you may need the credit for an emergency, etc... I applied any extra money I could to my principal. Some months were more than others. At the end, when I had enough to pay it off, that's when they received a big chunk. Always keep money in your 8 month emergency fund. You never know when you might need it.
Visitor I

What did it feel like to finally pay off your student loan? Any tips or tricks?

It was great the way I did it was I paid the minimum until I came into extra money like withe a tax refund and I would throw a big chunk of money at it. It’s not the best way but if you’re not making a lot of extra money then it’s best. Not to mention that if you pay on it for a long time it can benefit your credit.
Visitor I

What did it feel like to finally pay off your student loan? Any tips or tricks?

Personally, it felt like a ton of bricks had been lifted off my chest, which had been sitting there for 20 years. My advice is:

1) Pay cash. Save what you can through the year, and whenever you come into chunks of cash, send them to the loans. Keep making your monthly payments, no matter what.

2) Do NOT defer your loans, ever! Even if you go back for that graduate degree or take a couple classes here or there, you will automatically be placed on deferment. Get yourself off immediately! The interest that accrues when you defer sets your hard-earned time back. By doing this, I knocked 10 years off my loans (Yes, I was financed for 30 years!).

3) Stay on budget. Take care of your house, car, family, food, etc. But, you must always manage to make that payment. If you are a single income household this can be tough, just hang in there. If you are a two-income household, try to live below your means and use your extra cash to pay down those loans.

Finally,

4) As to credit cards, I wouldn't recommend it. Credit card debt, no matter the points, still has to be taken care of and you might not be able to handle those payments and student loans. Our family only uses debit cards and AMEX, which has to be paid off at the end of each month in full. Therefore, no interest. But we did not use AMEX to pay student loan debt.

I wish you the best of luck! I took loans because I wanted to attend the school I had dreamt of attending since I was a kid. It was worth the cost to receive the best education I could have possibly received.