Dave Ramsey Student Loan Debt

Dave Ramsey Student Loan Debt

The average American student loan debt is over $37,000, and it’s rising every year. For many people, their student loans feel like an unmovable behemoth that they’ll never be able to get out from under. But if you follow Dave Ramsey’s method of tackling debt, even the biggest of student loan debts can seem easier to tackle than ever before!

Dave Ramsey Student Loans

Once you’ve paid off all your non-mortgage debt, it’s time to focus on the next step of his Baby Steps: saving for a house. This is where Dave Ramsey’s student loan debt advice comes into play.

Dave suggests that if you have student loans, you should not be saving for a house until after your student loans are paid off. Here’s why:

• You may have heard that buying a house is one of the best investments you can make—that it’s “the American dream.” While this may be true, Dave believes that owning a home isn’t worth sacrificing financial security later in life. The reason? When you buy something with money you don’t have right now, it makes sense (in theory) to borrow money at low-interest rates now so that over time your payments will build equity as they pay down both principal and interest on what was borrowed earlier—and eventually reach 100% owned by yourself! But there’s one problem with this plan: unlike other types of consumer debt (like credit cards), student loans cannot be discharged through bankruptcy court proceedings; they must be repaid in full before any other debts can be settled! So if someone gets into trouble financially but has no way out financially because their mortgage payment will always come first under federal law (even if they file bankruptcy).

Snowball

The snowball method is based on the idea that you should focus on paying off your smallest debt first and then move to the next smallest debt. The idea is that this will help you keep the momentum going as each payment gets you closer to being out of debt.

Once you’ve paid off your smallest debt, take whatever amount you were paying toward it and apply it to the next smallest debt. Then repeat this process until all of your debts are paid off.

For example: Let’s say I had $10,000 in credit card balances with interest rates ranging from 7%–20%, but my car loan was at 4%. I would make minimum payments on all of my debts except for my car loan (which has lower interest). To get started with snowballing, I’d apply whatever amount was going toward my car loan to pay off credit card #1 with a balance of $2,500 and its associated 19% interest rate. Next up would be credit card #2 with an 18% interest rate and a balance of $3,000; then #3 at 17%, etc., until all cards were paid off (or near being paid off).

Loan Length

When considering a student loan, you should keep in mind that the longer the loan, the more interest you will pay. This means that if you have a shorter-term loan, then it will be easier to pay off and your total amount due will be less than with a long-term loan.

For example: If you take out $15,000 for four years at 4% interest over ten years and make monthly payments of $300 per month (including principal) vs. taking out $5,000 per year ($20k total) and making monthly payments of $500 per month (including principal). The first option would save you over $16k in interest alone!

Avoiding Debt in the First Place

Avoiding debt in the first place is the easiest way to solve your problems. If you do have debt, there are ways you can fix it:

• Try to consolidate your loans by contacting one of the loan servicers listed on this page. They will help you with any questions or concerns that may come up during consolidation and make sure everything goes smoothly.
• Look into income-driven repayment plans if you are struggling with payments due to financial hardship, unemployment, or other factors that affect your income. These programs may lower your monthly payment amount and extend the term of your loan—allowing more time for interest to accrue before the principal balance is paid off altogether! For more information on these plans choose “Income Based Repayment” from our dropdown menu above (on our homepage) or click here .

If you have student loan debt, it can seem like an unmovable behemoth. But by following Dave Ramsey’s snowball and prioritizing your loans, you might just be able to tackle that debt faster than you thought possible.

If you have student loan debt, it can seem like an unmovable behemoth. But by following Dave Ramsey’s snowball and prioritizing your loans, you might just be able to tackle that debt faster than you thought possible.

First, take a look at your total student loan debt. How much is it?

Second, identify the loans with the highest interest rate (or if there are multiple with the same high rate, choose one). These will be your top priority for paying off first and are called the “snowball” portion of this plan.

Third, set up automatic payments for each of those snowball loans so that they’re paid in full every month before anything else comes out of your checking account—including rent or other bills! This means that even if there isn’t money left once all other expenses have been paid on time each month, these payments still get made anyway because they’re automatic and require no action on your part except setting them up once at the beginning of each month or quarter as needed depending on when payments come due from lenders​ (e​x​a​m​p​l​e: monthly installment plans usually pay twice per year but quarterly ones may pay three times per year). Once again I strongly recommend Dave Ramsey’s book Paying Down Debt: His simple system has helped many thousands over the years eliminate ight their financial burdens quickly–and keep them away forever! Has anyone tried his method? What was their experience? Do any people here feel that this method would work well for them too? If so please share how much debt do most Americans carry today including mortgages car payments etcetera ..if there were no credit card companies or banks would our country go bankrupt tomorrow?

If you have student loan debt, it can seem like an unmovable behemoth. But by following Dave Ramsey’s snowball and prioritizing your loans, you might just be able to tackle that debt faster than you thought possible.