How to Pay Off Student Loans Fast: Avoid Paying Unnecessary Interest

0



Here’s the Video Transcript:

Hey whats up guys this is Mario and in todays video I am going to talk about How to Payoff your Student Loans Fast so you can avoid paying unnecessary interest now you guys are probably wondering what is going on over here well guys this is Oaxaca Textile Mexican Art and if you stick to the end I will explain more of what this art means I bought this piece in Chapala Mexico and I am going to explain to you why this is important at the end of the video so stick around guys back to the video so lets talk about Student Loans I was actually very fortunate to graduate from Northern Illinois University with a Bachelors Degree in Finance when I graduated I did have Student Loans I grew up with the mentality just growing up with my family my parents that debt was bad so when I graduated I worked really hard to pay that off as soon as possible and there is a lot to that, that I learned from paying that off and how I saved a lot of money on interest but there is more to it guys the reason why Paying Off Student Loans is so important is because you cannot get rid of Student Loans you cannot even get rid of Student Loans even if you file Bankruptcy guys Student Loans are pretty much like Taxes the government will go after you whatever it takes to get that money back now if you stop paying your Student Loans the government may even garnish your wages that means by law they can actually start taking money out of your paycheck to pay your student loans because you didn’t pay them so guys in this video I am going to teach you what steps you should take to pay your Student Loans as soon as possible so can save a whole bunch of money on interest and also pay it off sooner than ten years and this can definitely set you up for success for the rest of your life so don’t forget to smash the like button and subscribe to this channel thank you very much for your support guys alright guys lets get started just so you guys know the average student loan in the United States is around 30,000 dollars and the average length of repayment is around ten years at a six percent interest that means that the average student is going to pay around 10,000 dollars in interest over the lifetime of that loan the problem happens is when students actually end up paying only the minimum payment which is fifty dollars and when students do that when students pay only the fifty minimum dollar payment their original Student Loan of maybe 30,000 dollar can balloon up to fifty sixty seventy even eighty thousand dollars guys alright guys so what I am going to do very quickly is give you an example of how things can go wrong if you start paying bare minimum on your Student Loans so I am going to show you how to get this App so if you want to go to the App Store and search for Student Loan Calculator and you see this Student Loan Calculator with the white hat this is the one that you want to download it should be for free and now….

I have already included these numbers the numbers are I already included 30,000 dollars again like I mentioned before 30,000 dollars is the average Student Loan debt in the United States with around average 6% interest and the repayment period is ten years that is the average repayment period so if you press calculate this says that your monthly payment in order for you to pay your Student Loans in ten years your monthly payment is going to be $333.06 and if you see these red numbers that means that you are going to be paying $9,9967 $9967 $9967 $9967 in interest in total interest and if you look at the right hand corner the $39967 that is the total cost of your Student Loan over that period so when you borrow 30,000 dollars you will be paying a total cost of $39967 over a ten year period now if you scroll down you will see the Amortization Graph its actually really really cool now I am going to give an example of what happens when you do end up paying less than the required amount to pay it in ten years what happens is your loan duration in going to go up so to give an example your loan duration can be 20 years instead of 10 years so if you are paying 50 dollars a month it could go up to 40 years or more but this is an example if you instead of paying $333 excuse me instead of paying $333 a month to pay it off in ten years and you decide to pay $200 a month you will end up paying $21583 in interest so your total cost overall is going to be $51583 so it gets worse over time so lets say you end up paying less than $200 lets say that you know you end paying $180 a month that means its going to take you around its going to take you around 30 years to pay your Student Loan and you are going to be paying a total interest of $34752 so the total cost of your loan is goin to be $64,752 so the original $30,000 you actually borrowed to pay for college now is going to cost you double the money because you decided to pay less then the amount needed to pay off your loan in ten years so this is were students get in trouble guys so this is were things can go very wrong with Student Loans so how do you avoid that how do you change that how do you eliminate that issue so this is what you do so again your original plan is ten years that is the average original plan ten years so my recommendation is to make additional payments so lets say that you decide you know what I got extra money in my pocket I got I am not going to go to the bar this weekend I am going to save myself one hundred dollars for the month so I can pay that towards my student loans so if you make an additional $100 $100 payment every single month on your Student Loans you will actually I guess your monthly payment will be $433.06 you are actually going to pay less interest you are going to pay $6921 which is less than $10,000 so you are going to save it say right here in green you are going to save $3046 in interest and you are going to be paying your Student Loans 2 years 2.83 years earlier a little bit over 2 years and a half earlier so instead of 10 years you are going to be paying your Student Loans around seven years and half which is pretty nice so lets say that you decide you know what I am going to give $200 extra on my Student Loans to pay them off even faster maybe you stop going not only you stop going out to the bars but also you stop going out to eat so you press the calculate button now wow of course you are going to be paying a lot more you are going to be paying $533.06 $533.06 a month but hey you are only going to be paying a total interest of $5317 you will be saving $4,650 in interest this is money saved and you will be paying your Student Loans in four years in 4.42 years which is around 4 years and 4 months something like that so hey so instead of ten years you are going to be paying your Student Loans around 5 years and four months 5 years and four months thats pretty nice guys okay and again it keeps going on and on so the more additional money you pay upfront towards your Student Loans the faster you are going to be paying your Student Loans and the more money you are going to be saving so I am going to put $300 to kind of see what happens if you decide you know what I am going to stop spending money on things that I do not need on wants so I am not going to be spending money on wants I want to pay off these Student Loans as soon as possible so every additional extra money that I have that I will usually spend on wants like going out to eat buying things that I really don’t need I am just going to pour them on my Student Loans man see what happens so if you do that your monthly payment will go you will be paying $633.06 $633.06 your total interest will be $4,325 so that is total interest you are going to be paying from the $30,000 you borrowed you will be saving $5,643 in that period and you will be saving 5.42 years 5.42 years saved so that means that you are going to be paying your loan in around 4 years a little bit over a little bit over 4 years in a half so that is the secret guys that is the secret to paying off your Student Loans as soon as possible it does come with sacrifices I am not going to lie guys it is going to it is going to take some sacrifices but the truth is guys you have two options you either could make more income meaning you could work extra hours do some overtime or maybe get a part-time job or side hustle to make extra money to pay down your Student Loans or you can make some sacrifices instead of spending money on things you don’t need on wants like out on the weekends spending money on restaurants or on drinks or entertainment you can use that money to pay off your Student Loans for those of you guys who need some help budgeting who have no idea hey where am I going to get this extra money to pay down my Student Loans based on my current budget I don’t want to get an extra job I really don’t have time for that where can I get the extra money so I can pay down my Student Loans so I created this video guys How to Budget your Money the 50 30 20 Rule of Money were it talks about your needs your wants and your savings and investments and how you can budget your money money so you can find extra money to pay down your Student Loans now I am going to put up an little link you will see a pop up link on the right hand corner just click on that link and it will take you to watch that video well guys I want to quickly thank you for sticking all the way until the end but as promised I am going to talk about this art piece and what it represents well guys this is a traditional Oaxaca Textile Art this scene this art this scene actually depicts the Aztecs and the founding of the City of Tenochtitlan well guys you guys may be wondering what is the City of Tenochtitlan the City of Tenochtitlan is actually modern day Mexico City so pretty much legend has it that the Aztecs were following the prophecy of the god of sun and war the prophecy stated that when they find an eagle sitting on top of a cactus eating a snake that will be the spot where they should settle to build their new city the City of Tenochtitlan modern day Mexico City was founded on this prophecy this amazing beautiful prophecy of the Aztecs finding the eagle sitting on top of the cactus eating a snake and that is modern day Mexico guys so if you guys can see we have the eagle right here we have the cactus now only thing that is missing right here is actually the snake but if you guys see the Mexican Flag in the Mexican Flag you will see the eagle and the snake in the mouth and the cactus so thats were that comes from now you guys will understand why that is really important the other reason why I am bringing this up guys is that I am actually going to Mexico City in January so I am very very excited I am going to create a lot of videos that cover art history culture of Mexico City and I am also going to combine it with Finance so hopefully you guys enjoy it so hopefully look forward to that because I am actually very excited to do that I appreciate if you guys make some comments Subscribe to this channel if you guys can hashtag watched until the end it will really help with the YouTube algorithm and will really help support this channel to grow thank you very much guys I appreciate it until the next time

Read More: The EASY Budgeting App That Changed My Life || Real Life Personal Finance

As found on YouTube

License: Creative Commons