I Hope you know that as of today. October 1st Student Loan Payments are now resumed. The Kova 19 Student loan forbearance program has officially ended. So if you have student loans and you didn't make a payment today, then you need to get on that.

ASAP No. I'm serious. pause the video and go do that right now. I Feel it's been nice.

It's been real nice not having to make a student loan payment since the Feds dropped the interest rates to zero percent back on March 13, 2020. But now we're no longer living in a fantasy world and it's time to actually pay back the money that we borrowed. I'm sure plenty of you are just like my buddy Brendan who's in a whole world of pain right now. I Mean this man literally came frantically running into my office asking what the secret sauce was AKA if I had a video on student loan repayment strategies which I mean come on, if it's about Finance or money, you know your boy Sean's got some content on it so if you're not a subscriber on this channel, you should do so right now.

But the problem was the video I made on student loans like four years old. You can check it out link down below, but it's pretty old so here we are dialing that in even more. I'm going to show you a payment strategy in just a second on how you could drastically expedite the time it takes to pay off your student loans. But First you have to ask yourself, is it even worth paying off those student loans as quickly as possible or is it better for you to take that capital and deploy it into other aspects of your life or your budget to have a better return? Well, according to research done by history, Oracle Equity Risk Premiums Here's how you answer that question for 99 of people: If you're in your 20s and your student loan interest rate is above 5.69 then you should prioritize paying your student loans off as quickly as possible.

If you're in your 30s and your student loan interest rate is above 4.72 percent, then that's when you should prioritize paying your student loans off as quickly as possible. And if you're in your 40s, then that rate needs to be 3.76 percent for you to prioritize paying it off. And if you're in your 50s, it does not matter what your interest rate is, you need to pay those suckers off. ASAP You shouldn't still have them when you're halfway through your life now, personally.

I Live a life of being completely debt free besides financing assets. So if it were me, I'd say pay them all off as quickly as possible regardless of the interest rate. but at a very minimum, if you fit those boxes, then here's how you expedite your payoff. and it's a two-part strategy.

Okay, first off, you're gonna go to all of your student loan services and you're going to want to enroll in what's called bi-weekly payments. Now, bi-weekly payments mean that instead of making one payment once a month, you're actually paying half of that payment every 2 two weeks. And it sounds like the same thing. but it's not.

And let me show you, if you do monthly payments, there are 12 months in a year. So that means 12 payments. But if you make a payment every two weeks, there are 52 weeks in a year. Divide that by two.

What's your answer? No, it's 26, not 24.. it's 26 by weekly payments. Pretty trippy, right? If you were at times at 12 by 2, you only get 24 payment periods. It's pretty trippy, right? That's because most months have more than four weeks in them, right? They've got four weeks and a couple days.

So bi-weekly payments means you're actually making one extra payment a year. 26 bi-weeklies divided by two equals 13. Which means you just gave yourself another month out of the year. Which means there's an extra payment hitting your account every year and it really feels like it's the exact same payment.

Now, let's go ahead and put some numbers to it. Let's say you owe fifty thousand dollars on a loan with a 15-year term at 7. If you made bi-weekly payments. That technically means you make one extra payment a year.

Which means you'll shave about two years off of your loan and save about four thousand. seven hundred dollars in interest alone. And that's pretty vulnerable. What's even more? Ballers If you go one step further, instead of making your minimum payment in that specific scenario of 449 dollars and some change, you should actually round up to five hundred dollars even.

And this would mean that you're adding an additional fifty dollars and fifty nine cents per monthly payment. But since we're paying bi-weekly technically, that amount is a little bit more so for calculation purposes. Since this calculator doesn't do bi-weekly payments a hundred percent accurately, we're going to use the extra payment of 54.81 That's going to save you an additional two years off the loan and save you ninety one hundred dollars in interest. That's insane gains, financial gains, of course, and it's gonna feel like something isn't even stretching your budget at all.

People usually round up anyway when they say what their payment is. For example, when I'm working and I'm like, hey, how much is your car payment, they're like, oh, it's like 400 bucks. In reality, their payments actually 300 70 something dollars. So if you're already rounding up in your head, you might as well just round up with your bank account and pay that sucker off way faster.

But wait, there's more if you really want to attack your student loans and pay them off as quickly as possible. And you have to also do Part two: You Need to create a list. A list of all of your student loans with the exact balances on each, in the interest rates on each. you want to sort them from lowest to highest and I Know this is about to sound absolutely crazy, but no matter what the interest rate is on each of those loans, you need to start at the absolute lowest balance loan that you have and start attacking that one the most.

Once you pay that sucker off, start working your way up the line if you attack the smallest balance first. Not only are you getting a little dopamine hit every time you pay off one of those suckers in full, but it's going to free up your monthly cash flow to then take that monthly cash flow and throw it into those bigger loans. So not only does this make you feel better because it's rewarding that you're actually paying off debt, but the math actually checks out as well. Let me show you, let's say you have three loans: one for 15 k at about 159 a month, one for 22k at about 244 a month, and one for 34k at about 394 dollars a month each with a five, six, and seven percent interest rate.

Now, technically that big loan is absolutely killing us because it has the biggest balance and the biggest interest rate, but it's going to take you twice as long to pay that sucker off because how much of a beast it is. But let's say you get a big bonus at work or do some side hustle and you have some freed up ten thousand dollars worth of cash and you're like, how am I going to spend this? Well, a lot of people think they want to spend that money on the highest interest rate debt. Yes, and no. The problem with that is that even if you throw 10K at that loan balance, you still didn't pay the sucker off.

which means your monthly cash flow is going to feel exactly the same. So while it's great that you paid 10K on that loan, you're still paying 394 dollars a month on that thing. So it literally feels like you did nothing. You need to be motivated to pay off your student loans, which then frees up that cash flow.

So in that specific scenario, you'd pay off the 10-year Loan in less than three years, which would free up 159.10 a month month to go towards your next highest loan, which then gets that one paid off even faster and so on. and so on. For however many loans you have, Let me blow your mind for a second. All right.

What people don't realize is it's not actually the interest rate that kills you on a loan. it's actually the time spent paying on it. A 50 interest rate is nothing if you're paying on a loan for one year versus a five percent interest rate spread over 15 years. It's just math.

time matters more than interest rate, and speed matters when it comes to being debt free. The sooner you can pay off debt, the more You're Gonna Save and the better off you'll be. And sure you're gonna get people saying oh well Sean You should be taking that money and putting into the stock market for a seven to eight to nine percent return. Why would I be paying off five percent in interest rate debt? Yeah, okay.

have fun making 75 on your tiny little savings that are in the stock market while you're over here drowning in debt. kid. All right, the adults are talking here. This is how you take care of debt, but hopefully this video helped you grasp the content of student loans.

If it did, please hit that like button. share the video with a friend. And like I said earlier, if you're not already subscribed to this channel, you totally should be I'm always dropping great financial content that'll set you ahead of the person next to you. Otherwise, get cracking on that student loan debt and I'll see you in the next one.

Thank you.