This is the fastest way to pay off your student debt
It is one of the most common debts that many people have unknowingly incurred: student debt. When you choose not to pay for your most recent Bol.com haul immediately, but rather afterwards, you are entering into that obligation with full awareness. With student debt, that is often different. If you are as young as most students are when they take on that payment obligation, you are simply not yet aware of the aftermath that a loan or scholarship can have. Especially if you do not complete your studies.
But do you really have to pay off that student debt?
To find out how quickly you can get rid of your student debt, you will really need to log in to DUO. The amount you see may be confronting, but it is also a wake-up call. You immediately see how much you are currently repaying monthly, and how high the interest is on the amount you still owe. A high debt means high interest, which means you will have to pay much more monthly to actually pay it off. It is wise to check under which rules your debt falls. It can vary significantly whether you have to repay your debt within 15 or within 35 years. After that period, your entire debt will be forgiven. If you have an absurdly high amount listed under ‘debt’, while your repayment period is, for example, already over in two years, then you might want to consider how wise it is to transfer all your money to DUO right now. Still, most people just want to get rid of it as quickly as possible, because if you want to buy a house, such a debt can really get in the way of your dream home.
These practical steps will help you pay off your student debt as quickly as possible
The most important point is: check how high the interest on your debt is. You can repay minimally, but this way your interest can even be higher than the amount you are repaying. So definitely compensate that interest amount: if you want to repay 500 euros per month, you need to add the interest on top of that so that your debt actually decreases. Of course, you need to keep money for your fixed expenses, so check how much you can spare each month. Then it is also useful to think: how long do you want to take to pay off your debt? Divide the amount by that number of months, so you know how much you will need to pay each month. And don't forget to add the interest amount to this as well.
Make sure to schedule an automatic transfer to DUO for this amount. Then you don't have to think about it all the time, but it just becomes part of your fixed expenses that are also deducted via direct debit. Do you want to impulsively buy those nice pants from that one brand or maybe an extra pair of sneakers? Think twice. Set priorities. What do you really want? Those shoes right now (short-term reward) or paying off your student debt faster? You will enjoy the latter much more in the long run. But do reward yourself when things are going well. So if you have repaid 25% of your debt, 50%, and so on; think of a gift or fun activity for each step, something that makes you happy. That motivates you to keep going and you won't feel like you're depriving yourself of all the fun things in life.
Set up with your bank that everything you have left over is immediately set aside for DUO. You can, for example, open a special savings account where you let all extras be deposited. Once your fixed expenses are paid, and your money has been transferred to your regular buffer account, you can have everything you have left over transferred to the ‘debt savings account’. This way you immediately see what you can repay extra that month, and you then transfer this yourself to DUO. Do keep in mind not to give away too much, because DUO does not refund money if you miscalculated this month.
Excel is your best friend
Really an unpopular opinion, but excel is just your best friend when it comes to finances. I personally love to put in my excel sheets what I receive this month, what fixed expenses go out, what I have spent outside of my fixed expenses, and you can also create a tab for ‘student debt’. With nice colors, you can see how far you have come, and keep track of the status of your debt without having to ask DUO all the time. If you can't see it all anymore? Then take a look at what you have already accomplished, and keep that goal in mind: in so many months, I will be free of my debt. It will be a burden that flies off your shoulders once it is done. And then it's time for a good bottle of champagne!
