3 Ways to Pay Off Your Physical Therapy Student Loan Debt and Save $100,000

3 Ways to Pay Off Your Physical Therapy Student Loan Debt and Save $100,000

Like most physical therapists, I graduated school with nearly $75,000 in student loans. I had a mentality that for the next 30 years of my life, a hefty monthly payment would inevitably consume my finances. For years I paid the monthly payment with no intention of changing my strategy. Thankfully, I had the privilege of attending a seminar given to a group of young physical therapists by a successful financial advisor. Since that meeting I’ve been able to implement simple strategies and have paid off over $50,000 dollars toward my debt. Apply these 3 simple strategies to reduce your student loan debt and create a path of greater financial freedom.  

1.     Look at refinancing options: Let’s assume you owe $100,000 in student loans. By using an ammonization table, you can determine your monthly payments and total interest paid on your loan.

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Refinancing your student loans to a lower interest rate: 

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This simple strategy can reduce your monthly payment by over $200 per month. That could be a new car payment! There are a number of companies that assist with refinancing and consolidating student loans, including banks such as Citizens Bank and financing companies like SoFi

2.     Reduce your terms: Using the original $100,000, look what happens when you reduce the term amount to 15 years. 

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Compared to a 15-year term below: 

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By simply reducing your term length, you can reduce the total interest paid on your loan from $134,693 to $59,793. That’s nearly $75,000 dollars in your pocket. 

Now, let’s consider what happens when you re-consolidate and reduce your terms: 

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By reducing your terms to 15 years and lowering your rate to 3.5%:

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Although you are paying an extra $62 every month, you're reducing our term length to only 15 years, and reducing the total interest paid to the lender to only $28,676.86 You’ve now saved $106,016.21. 

3.     Overpay when you can: My final recommendation for reducing the burden of your student loans is to overpay whenever you can. If you get paid a monthly or yearly bonus, take a portion of that money and send it directly to your lender. Overtime this will make a considerable difference. Warning however, make sure you call your lender to indicate that you want the additional money to be applied toward the principal of the loan rather than the interest.

As you can see, you don’t have to be a mathematician to get your student loans under control.  By implementing these 3 simple strategies you can save tens of thousands of dollars. Most people struggle because they aren’t even sure where to get started. Before you know it, it’ll be 10 years into repayment and you’ll already have lost what could have been a down payment for a new home. The first step is to start taking action. Trust me you and your bank account, will be happy you did!