The Benefits of Paying off student loans fast


– Student loans. The one debt that you
can never get rid of, unless you actually pay them off. So what are you student
loans really costing you? Stick around, because I’m gonna show you what your student loans
are actually costing you if you’re only paying minimum payments. (electronic music) As of the second quarter of 2017, there’s 1.3 trillion dollars that are owed in student loans, and that’s
over 42.3 million borrowers. People between the ages of 18
and 49 own 70% of that debt. Come on, millennials. What are we doing here? We’re better than that. Let’s knock that number
down a little bit, huh? 66% of the delinquency
rate comes from people who are 40 years old and older. So guess what, millennials? The longer you hold onto
your student loan debt, the longer you push it off to the side, that’s you. So I pulled some data, and the average student
loan amount is $31,500. The average interest rate, 5.3%. The average monthly payment, roughly $300. That would take you 12 years to pay off, and you’d be paying $10,500 in interest. Add those numbers together,
principal plus interest, and you’re looking at about
$42,000 over 12 years. Let’s play a little game of What If. Because I don’t know your exact numbers, let’s go off the average. So, instead of paying $300 a
month like the average person, what if you doubled that
and paid $600 a month? If you were able to scrounge up an extra $300 a month to put
towards your student loan, you’d save yourself $6,200. That’s $4,300 that you’re
paying in interest, as opposed to the $10,500
like the average person. You’d also have your student
loans paid off in five years as opposed to the 12 years originally. That’s seven years sooner. So not only are you saving yourself money in the interest you would be paying, you’re also saving yourself time in the form of seven years. What would you do with that seven years and that $6,200 in your pocket? I got a few ideas. So if you decide to pay that $600 a month, instead of paying $4,200 over 12 years, you’re only paying $35,700 total and paying them off in
less than half the time. So what’s that $300 a month,
times that seven years that you wouldn’t be making payments? That’s roughly $25,000. $25,000, people, what would
you do with that money? Now, let’s go off the
$600 a month payment. If you paid $600 a month
for that seven years, seven years that you
wouldn’t be making payments that you would save yourself if you did pay $600 a month
for the first five years, how much would you have in your pocket? Over $50,000, 600 times
seven years, is $50,000. Yes, I can do math, I swear. $50,000! That’s a lot of money. That’s a lot– $50,000, that’s a lot of money. I’m gonna say it again. I don’t care how rich you are, $50,000 is a lot of money. How many vacations could
you take your family on for less than $50,000? How much do you think you could make if you invested that $50,000? Do you think $50,000
would be a good investment for a college fund for your kids? How about a down payment on a house? How about for that car that you’re going to eventually need? It’s $50,000. The possibilities are endless as to what you could do with that $50,000. And not just the money, the time. You gotta think about the time. Seven years is a long time. Knocking seven years of payments off in five years, holy smokes. Do you understand how free
you’ll be able to feel for seven years sooner than
the other people around you that paying the minimum payments? Do you think it’s worth it to suck it up and pay a little bit extra now as opposed to paying for
a longer period of time. I think so. So if you can find an
extra ten dollars a day, that’s $300 a month. How can you make an extra $10 a day? Ask yourself that question. What can you do in your daily spending where you can save
yourself ten dollars a day which will equal that $300 a month? You got to start thinking outside the box. You can’t be thinking like
everyone else around you. Because thinking like everyone else is gonna keep you in that same boat as them. And there’s a reason that most people have all this student loan debt. It’s because they’re
all doing the same thing and that’s a problem. So you don’t really have
a choice at this point but to start thinking outside the box and start trying something different. Because if you don’t, you’re going to continue to be a statistic. Guess who forgot to shoot an outro? This guy! So I’m gonna do it right now. Thank you so much for watching this video, I greatly appreciate it, I hope it helped you understand your student loan situation
just a little bit better. If you have any questions, comments, feel free to leave them down below or send me a private message. Hit that subscribe button, I would greatly appreciate that. And if you want to sign
up for my email list. The link is in the description or somewhere around my head, I think. I think it should be there. I’ve got a lot of cool stuff planned for everyone on that list. I’ve got a debt-free course coming out, I’ve got a lot of tips and tricks for if you are trying to get out of debt, how that can help you. A lot of different challenges, promos, free stuff that I’ve got coming out and so much more but if
you’re not on the list, then you’ll be left out and
I want you to be left in because you’re my friend. Alright, thank you so much, have a great day, love you, adios. (electronic music)

7 thoughts on “The Benefits of Paying off student loans fast

  • One thing to add, while you pay off your student loan debt, you can recalculate your minimum payment at anytime. My standard repayment plan has dropped from over $300/ month when I owed $32,000 to only $227/ month with only $20,000. This of course doesn't mean you should pay less in total, rather making this minimum payment toward your total balance and using the rest to target a specific loan (e.g. highest balance, lowest balance, highest interest rate…) While recalculating your payment, you may also choose a different term-based plan. In addition to standard as I mentioned, I also have a graduated repayment plan of only $147/ month. That also decreases as I make additional payments. Your options may be different, but the goal is the same. Reduce your total minimum payment so can make larger targeted payments. I make payments of almost $1000/ month or 6-7x my minimum, and that's on a salary only of about $1900/ month.

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