Buried in student loan debts? It's time to get out from under them. In this article you'll learn how to automate and eliminate those student loans once and for all.
Student loans suck. As soon as you get out of high school and head to college you're quickly buried in debt and don't even realize how bad it is until you graduate. Once you get out to find a job, you find it doesn't pay nearly as much as you expected starting out and the student loan payments begin. Welcome to adult life! You're buried in debt already and struggling with your finances...
I've been there as well. I graduated with about $40,000 in student loan debt and ended up only making about $45,000 a year with that expensive finance degree... The student loans we're ridiculously complicated and messy. I had bills coming in from all over the place. I had to send 8 different payments out every month to 8 different lenders! Once I thought I had figured out the mess, one of the lenders would sell off the loan to another lender changing who I would send it to! What a mess!
Luckily for you, times are changing with new apps and tools to help make the process easier. Are you buried in student loan debt and ready to get out? Here's a way you can automate you student loan debt repayments.
Step 1 - Sign up for Student Loan Hero
There is a great tool to help with all of that student loan debt called Student Loan Hero. You can sign up at www.studentloanhero.com. It's a very cool site that will pull all the information you need about your student loans and keep it up to date in a clean and simple dashboard. When I was working on paying off my student loans I had to maintain a spreadsheet and attempt to keep it up to date as the information changed each month. It was not fun. Student Loan Hero automates that whole process for you!
Step 2 - Add All of Your Student Loans
Once your signed up for Student Loan Hero and have logged in. It will immediately attempt to give you some solutions to help pay off your student loan debt like consolidating it into one loan and will tell you if that is a good option. You will next need to add all of your student loan debt. It allows you to sync up all of your federal student loans and other student loan servicers like ACS, Earnest, FedLoan, Navient, and Nelnet. If one or more of your student loans is not on that list you can always add it manually and that is still much better than the old spreadsheet.
Student Loan Hero will then provide a dashboard for you that lays out all the information you need to know about your student loans. It will tell you how many loans you have, your total balance, avg interest rate, and your total monthly payment. In addition for each individual loan it tells you the balance, rate (apr), and the monthly payment. Best of all it keeps all of this information up to date for you automatically which is half the battle. This would have saved me so much time back when I was trying to track all of my student loans on a spreadsheet every month.
Step 3 - Create Your Plan
Next, you will need to create you plan to pay off those student loans. Luckily once you've synced all of your student loans, Student Loan Hero can help you with that. You'll need to enter how much you can pay towards those student loans. Here is a simple formula that will tell you how much you have available to spend on them.
Income - Bills (Not Including Student Loan Payments) - Savings = Spendable
The spendable amount is what you have left over. After accounting for day to day expenses such as groceries and fuel you can set a side a certain amount of that to focus on paying off your student loan debt.
After entering how much you can spend towards your student loans, Student Loan Hero will allow you to choose a plan to payoff those loans. It will tell you how much your total payoff will be, interest paid, and when you will be out of student loan debt. If it is the best option in your situation, it will even allow you to apply for a loan consolidation straight from the app.
Once you are done it will update your dashboard and then list all of your loans in order of priority.
Step 4 - Automate Your Payments
Your plan is now in place. Now it's time to automate the pay down of those loans so you don't even have to think about it. You have a list of all of your student loans, when they are due, and what you need to pay towards them.
You will need a system that will automatically pay those loans on a schedule for you. The best one for me has been my very own banks online bill pay system. Pretty much every bank or credit union should have one at this point. If you have something better, by all means go for it. You will need to enter each student loan into your bill pay system as a reoccurring payment. So for example:
If I had a student loan from Sallie Mae that was due 6/1/2016, but I got a weekly paychecks on Fridays and the most previous one was Friday 5/27/2016. I would create a reoccurring payment the day of my paycheck but prior to the loan payment due day. Here's a breakdown:
5/27/2016 - Paycheck comes in on Friday
5/27/2016 - The Reoccurring Payment comes out to Sallie Mae
6/1/2016 - Sallie Mae Loan is paid!
This will repeat itself every month! You bill pay system will automatically pay off your student loans each month without you even having to think about it.
You'll need to setup this process for every single student loan you have according to the plan you created in Student Loan Hero.
Step 5 - Do What You Love While Technology Takes Care of Your Student Loans
That's it! Now that you're student loans are being paid automatically and in the best way according to your plan you can sit back and enjoy life without worrying about that student loan debt. To keep everything running smoothly you should schedule a couple maintenance habits on your calendar that will only take a few minutes but keep your system running smoothly.
Habit #1 - Once a week take 5 minutes to review your finances and make sure everything is going as planned and all your student loans are being paid. If there are any issues take care of them and it will keep on running.
Habit #2 - Once a month take 5 minutes and review your plan and make any adjustments necessary as student loans are paid off such as removing an automatic payment for a loan that has been paid off.
As long as you take 10 minutes a month to review your system everything should continue running smoothly.
If you've gone through this entire guide and have automated your student loan debt, congrats! You're on your way to being student loan free! Feel free to comment and let me know if you have any suggestions or success stories. Thanks for reading!