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Interest on Student Loans is Your Enemy

You probably have lots of friends in your life. But I promise you, interest on your student loans is not one of them.

Interest on student loans is your enemy. And the only way you can kill the little bastard is by making sure that your monthly payment is big enough to pay the interest for the month plus as big a chunk of the principal as humanly possible.

Tuition.io wrote a great post that will help you learn more about how interest on your student loans really works. You’ll do yourself a big favor to read it now.

Interest on student loans works different than what you may be accustomed to on credit cards or cars.

VERY different.

Especially if you are on one of the programs that provides you a “low monthly payment”.

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A Fun Story of a Couple Who Got Serious About Paying Off Their Student Loans

Here’s a fun story about a couple who got serious about paying their student loans off quickly. It’s a great example of being intentional about getting out of debt.

Here is the essence of how this couple decided to tackle their student loans.

“Rather than starting off our adult lives buying new vehicles, taking vacations, purchasing new electronics and appliances, or buying a home, we denied ourselves these enticements. Rather, we rented a small 600 square foot apartment, worked overtime, made most of our meals at home, didn’t take vacations, and drove used cars.

In turn, we were able to keep costs to about a 30 percent of our combined income. This allowed much more money to go toward student loans.

And by paying as much as we could toward loans rather than just the standard monthly payment, we had my wife’s loans paid off in less than three years…and so, the wedding planning began.”

It took sacrifice and a commitment to make it happen. That’s the important takeaway.

I doubt it was necessary to hold off the wedding until they got rid of the student loans! But maybe that helped.

If nothing else, it made the story a little more controversial… and probably increased the number of people who read it.

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Changing Your Family Tree

I love to hear stories of people dealing with student loans and deciding to pay them off quickly. And I really love it when they go so far as to start saving for their own children’s college… even grandchildren’s college. Roger wrote this on a LinkedIn article I published about student loans and how they [...]

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An Opportunity to Help a Young Person Prepare Themselves Financially

If you are a parent, a soon-to-be-parent, or a grandparent, I encourage you to take a couple minutes to peek into the mind of a young person. Here is a very interesting article by a high school senior about what she is being taught about debt and going to college. It is both telling and [...]

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Are You Investing with Borrowed Money?

One of the questions that usually comes up when talking about how fast to pay off student loans is “Well, shouldn’t I invest my money rather than pay extra on my debt? It will grow at a rate in excess of the interest I am paying on my loans”. The wise answer to the question [...]

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Ken Paid a Price to Become Free From His Student Loans

I love reading stories about people who paid a price to become free from their student loans. Ken Ilgunas is a guy who went to great lengths to pay his student loans off quickly. I love it. Here is a quote from the beginning of the article: “By the time Ken Ilgunas was wrapping up [...]

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