How I Paid Off $15K of Student Loan Debt in One Year

paying back your loans
Photo by rupixen
After finishing college, most students have a large amount of student loan Debt.  I had a whopping $42K after it was all said and done.  I did not pay close attention to my finances in college, and I paid for it (literally.)  I had accrued $2000 in interest before I had even graduated!  I know I had to attack these loans full force. My most painful loan was $15K, a loan that my parents cosigned at 8.75%.  This loan was taken out during the worst of the 2008 liquidity crisis, and no banks were loaning.  It was unfortunate for me because I needed cash to pay for school!  So I had to take out a loan at a loan shark-like rate of 8.75%  By the time I had graduated, the loan was almost $17K…The numbers were a rude awakening to me when I finished College.  I felt like I had to do something about this debt, so I dedicated myself to paying at least the $15K loan off in one year.  Here is how I did it:

I Got a Job

This was a significant turning point in my life.  I finally got my first full-time job and officially stepped out into the “Real World.”   I was thrilled because I secured a position that was in my field of study.  My income was around the Median for my geographic location.  I was happy just to land a decent paying job in “This Economy.”

I Lived With My Parents

I moved back and lived with my parents for the first year after I graduated.  This helped me save a lot of money.  I was able to save around thousands of dollars in rent by living with my parents.  I saved money on food and stayed on the family gym membership.  I used these savings to pay aggressively toward my student loan.

I know lots of college students want to feel independent and move out on their own. However, it may not be the best financial decision.  I really had no problem moving back with my parents because I knew that I wanted to save my money.  Additionally, I was able to spend more time with my family.  I lived away from home after college, so it was refreshing to return home and live with my family.

I Bought a Used Car

I needed a car to get to my job. However, I did not want to take on much more debt.  I bought a used car on Craiglist, and I am still satisfied with my purchase.  I purchased a 7-year-old economy car, and it really saved me a lot of money compared to financing a new car.  It is reliable, it gets from point A to B, and I always keep it clean, so it looks new and fresh.

Using the above strategies, I put a big chunk of my money into debt reduction.  My goal for 2011 was to pay off the 8.75% debt, and I accomplished it in 11 months.  It was an uphill battle, but I am happy that I persevered and now stand over my debts.

Readers, how much student loan debt do you have?  What measures are you taking to pay it off quickly?