Paying Off Debt – Slow and Steady or Full Speed Ahead?

Published on Author Bethany Sims

Getting out of student debt as quickly as possible is one strategy that many consider when it comes to paying off their debt. Borrowers with student debt often sacrifice building up their emergency savings or forego investing in their retirement fund to reduce their loan balance down to zero. Psychologically, debt is seen as a roadblock to our financial goals with all of our energy, and cash flow, focused on getting it out of the way.  If student debt is a roadblock, then think of refinancing as an off-road vehicle.

With record low interest rates today, refinancing your student loans can free up cash flow to use your money more wisely. If you throw every spare dollar at your debt, then you miss out on the opportunity to save or invest these funds. Sacrificing an emergency fund to pay off student debt can end up costing you more if you have to turn to high-priced credit cards for unexpected expenses.

Slow and Steady

This strategy doesn’t mean minimum loan payments. Refinancing into an 8 or 12 year loan term, both offered through Purefy, can be long enough to keep your monthly payments down as well as start, or continue, to build your emergency fund. Investing or saving what you can, be it $10 or $100 a month, will help you when unexpected expenses arise.

Full Speed Ahead

A 5 year term, typically the most aggressive for student loans, can save you thousands on interest costs by paying off your debt faster. Purefy has no prepayment fees, so if you want to max out your payments and get out of debt faster, we won’t stop you. Depending on your situation, the 8 year term, our most popular choice, can be an aggressive goal to help you get out of debt. On average, Purefy borrowers are able to shave 3 years[1] off their loan term when they refinance with us.

Broken down cars and medical emergencies can’t be controlled, and big expenses do pop up unexpectedly.  If you don’t have a built-in cushion because you are focused only on student loans, then it can lead to more debt and financial hardship. Think of all your financial goals when deciding which refinancing strategy is right for you – “slow and steady” or “full speed ahead.”


[1] Based on Purefy borrowers from January 1 – August 31, 2015.

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