How To: Get Rid of Student Loans Fast
A way you've never heard of before
When I first learned about this method, I did not believe it. I have read so many articles about decreasing student loans that all basically listed the same ideas. "Attack it aggressively," "use tax benefits," "FAFSA," and blah blah blah. The redundancy of all the same ideas made me feel even deeper in the whole. After years of searching, I have found a way that I have never heard of to get rid of student loans fast. I had no idea this existed or why everyone was not doing this, so I thought "this surely must be a scam." I can assure you that this is no scam, and that this method WORKS! And this is NOT some clickbait article that claims "creditors don't want you to know this," because actually creditors love this method.
Before I dive deep into what you can do with your loans, I will give you a little background on myself. After attending pharmacy school for three years at a private institute, I found that Pharmacy was not my passion. I had quit my job in a pharmacy and started working what I called "my temporary fun job" as a barista for the summer, while also working at my own business. When summer came to its end, I realized the thought of reapplying to a pharmacy job sound TERRIBLE. There was no way I could go back to school to practice something I am not passionate about, and then work for it for the rest of my life! Finance was my true calling (hints my finance blog) (DISCLAIMER: I AM NOT A FINANCIAL ADVISOR, NONE OF THIS IS FINANCIAL ADVICE). There is nothing I love more than chugging out numbers, saving, investing, and figuring out how to make money work for me! After three years at a private college for pharmacy, I found myself deep in debt... deep deep... Like $50,000 deep... Not to mention the ridiculous interest rates on students loans that typically range around eleven percent! After dissecting my finances, I found that my monthly automated payments WERE NOT EVEN COVERING THE INTEREST! This made my sick to my stomach, and at this point I would rather put my hard earned money into a paper shredder than hand another dollar over to the lenders.
If you really want to feel sick about your student loans, play around with some numbers on this student loan calculator and see just how much extra you are spending JUST ON THE INTEREST!
Basically here is what I did. Some law firms will work directly with you and your lenders and come to a settlement amount. Basically they will buy your debt from the lender anywhere from .20 on the dollar to .40 on the dollar. You may be thinking, "Why would lenders want that?"
The simple answer is that money is money, but to draw it out even further... Your lenders want to get paid, and the sooner the better! This is upfront, cold, hard cash put into their pockets! After the debt is bought, certain lenders will negotiate a plan with you! In this case they were able to give me a settlement of almost $35,000 with NO INTEREST! So paying $972 a month for three years will remove the shackles of student loans on me. There is nothing worse than starting your career below zero.
$972 is a lot of money to pay a month; however, these amounts can be negotiable for most cases... In my case, I have chosen to take a more aggressive approach, and work tooth and nail for three years, than postpone my freedom any longer!
Now you are probably thinking, "What is the catch... Why would they just give you $15,000?" And I will go over that! Basically the catch is that you have a set amount of time to pay this off regardless of if you have a rough month with money. Since there is no monthly late penalty, if you do not pay it off in the amount agreed upon between you and the firm you're working for, then you will be subject to bankruptcy... which is a scary word!
My thought was "would I rather pay $15,000 more, not including that extra interest which makes it almost impossible to pay off quick, or would I work very hard for the next three years to achieve financial independence and possibly early retirement while I am still in my twenties?"
I hope this article was helpful, and I hope you figure out what works best for you! Never chose any financial plan because someone else has, find what works best for you! I chose to share my path in case this sparks someone else out there to learn new ways to get rid of debt! According to CNBC, only about 23 percent of Americans are debt-free!
THIS IS NOT FINANCIAL ADVICE. This is solely a blog about my personal experience and approach to my student loans. Never do any financial planning or decisions based on what someone else has done! Do your research and figure out what works best for you and seek help from a licensed financial advisor or counsel for financial advice!