Can You Use Velocity Banking To Pay Off Student Loans? | Does Velocity Banking Work On Student Loans

Can You Use Velocity Banking To Pay Off Student Loans? | Does Velocity Banking Work On Student Loans

so can you use the velocity banking strategy to pay off a student loan that's a great question we're gonna answer it in today's training hey everyone it's Mike Adams and on this channel we empower individuals to achieve freedom to improve financial literacy if you're new to the channel make sure to click subscribe click the bell so that way you get notified on any and all of our future content so in this video guys we're gonna answer the question of can you use the velocity banking strategy to pay off your student loans and so maybe you've seen other videos online where you've heard about you know paying off a thirty-year mortgage in a fraction of time or pay off a mortgage in five to seven years and you're like well Mike what about me I don't have a mortgage yet right but I have the student loan and maybe you have a really big student loan that you'd like to get rid of can I use this philosophy banking strategy to get rid of this loan all right in a fraction of the time and the bottom line is the answer is yes and if you haven't seen our main velocity banking overview video that we use on this channel I'll put a link to it below this video or I'll put it in the cart at the end of this video so you can check that if you haven't seen the main video cuz the bottom line guys is the velocity banking strategy can be applied towards any loan or any any amortized repayment schedule debt that you have so that goes for your auto loans or student loans you know and obviously your mortgage so when it comes to your amortized loans guys you can apply velocity banking to all of them so what I wanted to do in this video here is just really walk you through how quickly you could pay off a loan really and we'll use some of the average numbers that I've found online for the average student loan we'll take some of those numbers and I will spread it out here and we'll show you through a utilization of a strategy like velocity banking how you can eliminate this loan in a fraction of time and save a boatload of money and interest and this is all gonna be without sending in additional principal payments or or refinancing so first things first let's put there are baseline numbers here and let's jump on the ultimate source here Wikipedia and wikipedia says that according to Forbes okay in June in 2018 that the average student loan debt was thirty eight thousand three ninety okay so we're gonna use that in our example we're just gonna round it to thirty eight thousand just to make it easy so I'm gonna take that and pop that here into the calculator okay and then as far as the average interest okay I found this right on the student aid gov website okay and I'm looking at these interest rates right here so this is what we're gonna use and so I'm seeing five percent seven point six percent six point six and so for the illustration let's go ahead and use this number and obviously you can you know use your own numbers for this scenario but we'll use six point six because it looks like that's the middle one so it'll take that okay so I'm gonna pop that in here six point six okay and typically a student loan is going to go for about ten years okay so we're gonna put a ten-year repayment period and here's what we see okay okay we pop that in there and so here's what we see is over the life of this loan okay number one is we got ten years with the payments here okay and these payments are beefy okay um this is a four hundred thirty three dollar per month payment and for some folks and this is why individuals will get into trouble when it comes to student loans because for some folks you think okay I'll pay this off in ten years that's a beefy payment for some folks to deal with especially when you're not able to find a job right away okay or you're not able to find employment in the field that you went to school for so you're taking some type of job at a reduced wage so maybe that payments a little beefy but either way had a ten year that's what it breaks down to but I did see a study online that show is that the average person takes about seventeen years to pay off their student loan okay but either way we're gonna mark it as it normally is for the ten years and so here's what our numbers look like on this yet the four hundred thirty three dollar per month payment and over the life of the alone at 6.6 percent okay you're gonna pay about $14,000 worth of interest on this loan okay so you started at 38 you're gonna pay about 52 over 10 years you for your college degree for your education okay so you know it and that's what it would be if we made our payments month after month but what if we applied this velocity banking strategy and for those that aren't familiar again we'll link to the main strategy video below this video or at the end of this video but for those that aren't familiar the main premise of velocity banking is number one is we need to establish a budget okay number two is we need to create what's called positive cash flow and number three we are gonna start leveraging a line of credit and you're gonna start using a line of credit as your new checking account instead of using the bank checking account to pay all your bills you're gonna start using the line of credit and what we're gonna start doing with that line of credit is we're gonna start making what's called chunk payments okay on your loans where we're essentially taking a chunk of the amortized loan and bringing it over to the line of credit okay and I'm going to show you how this is an insanely powerful strategy that you can use to eliminate these loans much money really in a fraction of the time and save a boatload of money in interest so let's say you were looking to pay off this loan early let's say you were one of the lucky ones that you were able to find a job and so you have an income coming in the door every single month of three thousand dollars of net income coming into the household every single month and your bills all of your expenses including this payment that you make every month on the student loan come to about $2,500 per month so that gives you a positive cashflow number of $500 okay so we have three thousand dollars worth of net income and $2,500 in expenses okay and that includes your your lodging your utilities your food the student loan payment so your your net cash flow is five hundred dollars every single month okay and and again bear in mind the strategy only is going to work if you have positive cash flow the bottom line guys is the only way to pay down principal is to pay down principal so you have to make more money than you spend point-blank so again in this scenario we're using a positive cashflow number of five hundred dollars and essentially what you would want to do is you would take that line of credit and you would write yourself a check off that line of credit and you would make a very large chunk payment over to the loan dragging that amortized chunk over to your line of credit through utilization of our velocity banking strategy what we're doing is we are putting all of our income into the line the line becomes your new checking account okay again you if you haven't seen the video click below and make sure you watch it to thoroughly understand this but all of your money every single month goes into the line all of your expenses get paid with the line and so every single month that balance on the line is gonna go down by your positive cash flow number – any interest that might be accrued on that line of credit but if you hang out on our channel if you jump on our youtube channel we have plenty of training on there to teach you plenty of techniques on how to find the right lines of credit how to get the right terms where you can get low you know either you know or low fee transfers so you can pull chunks off your loans bring it to these lines and even techniques on how to negotiate for 0% interest while you are counting carrying a balance on those lines so make sure to you know jump on the channel subscribe to that so let's say you came into this thing prepared you know you have your student loan you've graduated you've got your job know and now you tie it it's time to start making payments on this loan and you came to think prepared you but taking care of your credit and you have a $5,000 limit credit card okay and we as we discussed we have bills of about three thousand dollars and as we already stated you have an income of about three thousand dollars per month and expenses of about twenty-five hundred dollars per month so positive cash flow number of five hundred dollars so what you would do is you would take that line of credit and right away month one is you would be able to make a chunk payment to writing to this loan of $2,000 and so now since your expenses are about twenty five hundred dollars every single month we have to leave that much room on your line of credit cuz that's again gonna become our new checking account all of our money's gonna funnel through there okay so if you have a five thousand dollar limit card and your expenses are twenty five hundred that leaves us about twenty five hundred dollars or with the room to where we can take that leverage there and grab chunks off that loan and bring it over to the line okay so month one you go ahead and pay all of your expenses using the line of credit so we got 2008 zero balance on that card now we're up to twenty five hundred dollars and then from there you grab a chunk off this loan of twenty five hundred ollars and bring it over so we've maxed out that card okay month one okay but let's take a look and we'll deal with this okay but let's take a look at what this did to our loan because month one we were able to go ahead and send them an additional $2,500 principal payment and the total interest on this loan is currently fourteen thousand dollars over the life of this loan okay by pulling this $2,500 over to the to this line you're gonna instantly save okay so it dropped us from fourteen thousand let's see so I dropped us from fourteen thousand flat to about eleven eight so that instantly saved us about twenty-two hundred dollars worth of interest right off the top of the life of this loan okay so but now you're thinking well Hiba Mike well that's that's great but I just maxed out this credit card okay well every single month all of your income is gonna now hit this line of credit so yeah you wrapped it up month one you maxed it out all the way to five grand but now you've got all of your income your three thousand dollars hitting this line of credit which is gonna bring it immediately down to two thousand okay next month you would put your twenty five hundred and expenses on the line bringing it back up to forty five and then you would put your three thousand in bringing it down to fifteen and every single month what you'd see is a reduction in that balance by your cash flow number okay so in this situation our cash flow number was a $500 per month cash flow number so it would take us about it would take five months to reduce that line of credit down to zero then you'd be able to do another chunk so let's go ahead and play this out so again month 1 2 3 4 5 now that line of credits down to zero okay you can again pay all your expenses on the line ok 2500 leaves us at $2,500 worth of room grab another $2,500 chunk from the loan and bring it onto the line and watch what this does to our total interest okay so again now okay it's gonna bring us all the way down to about 10,000 okay so think about what we've just done here and we're six months into you repaying your student loan and you've already saved yourself almost $4,000 out of 14,000 a pure interest off the life of this loan we've knocked off about 20 payments that you're not gonna have to make so that's almost two years off the life of the loan and we're really just getting started you just utilizing this method again you'd be able to rinse repeat again all of your incomes hitting this line your positive cash flow of five hundred dollars is knocking down that line of credit every single month and every five months you're able to do a chunk payment and let's go ahead and play this out and see how quickly we would pay off our student loan doing this and again in comparison to the average 17 years that it takes for a student to pay this off [Music] [Music] okay and we're just about at the end here so it looks like we're gonna meet up boho wow this is really huge so be about 4:18 on the last chunk here boom okay and so that's 46 months okay so through leveraging the strategy of velocity banking again this is also assuming a zero interest line of credit again if you're really up to speed on the strategies that we use and talk about here on this channel there are many many ways that you can I'll say work the game to be able to get zero percent interest over the life of doing this but even if you did pay a little bit of interest it's going to pale in comparison to what we were able to do here okay to eliminate this this debt because the bottom line is we were able to eliminate a $38,000 student loan okay in a fraction of time again typically it's gonna take the average person about 17 years because they're gonna default they're gonna miss payments all these things are gonna happen because they're dealing with that big beefy payment and over the life of ten years things happen okay if you're able to go ahead and knock this dead out in four years no hey there's a chance that four years can go by without a major emergency ten you know 17 years you know things are going to happen which we're just gonna cause one of these defaults and things like that so through utilizing velocity banking at the resizing leveraging line of credit we were able to eliminate the student loan in just under four years have 46 months worth of payments and it looks like we were able to we only paid about 4,800 bucks worth of interest on this loan instead of the original 14,000 so we saved almost 10 grand worth of interest there and now you're done now you're done with this student loan payment now you don't have this four hundred thirty three dollars a month you have to deal with in more and now you have this line of credit that you could use to actually start building well so that's how you can use the velocity banking strategy to pay off your student loan in a fraction of the time again if you haven't seen the full overview on the velocity banking strategy we will link to it below and at the end of this video and again if you have that student loan a car loan any kind of loan this velocity banking strategy can be used to pay it off much much quicker leveraging lines of credit if you found value in this training guys make sure to give it a like give it a comment below I will see you in the next video [Music]

how to pay off a student loan fast

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