Transcript for A 0-based budget helped this woman pay off $215K in student loan debt
We go to our series debt-free decade helping you shed the debt and this morning a young woman overwhelmed by $215,000 student loans revealing how she paid it off in just 48 hours. Rebecca Jarvis is here with the story and a lot of people want to hear this. Oh, yeah, absolutely. Student debt, those are two words that can fill us with dread. The average student is now graduating over $30,000 in debt but that woman you're about to meet had more than seven times that amount until she made a plan and took action. As the daughter of immigrants 30-year-old Cindy Zuniga says she was raised to understand how destructive debt can be. Stay away from the debt. We can't afford it so we won't purchase it. Reporter: Her decision to go to law school came with a hefty $215,000 price tag and says she thought she was doing well chipping away at her mountain of debt but automating her monthly minimum payment of $2,000 until she saw her income tax statement. Out of the $24,000 that I had paid off, about 20,000 went to interest. 20. And about 4,000 went to the principal and I think I started crying. Actually I did start crying. Reporter: Cindy says she turned to every financial guru she could find and came up with an aggressive plan to pay off her student loan in just 48 months. Her first step, refinancing with a different lender at a lower interest rate. By refinancing my minimum payment went up and so I just had to budget around that. I had to sit down and say, well, I'm going to cut back in X, Y, Z areas. Next she created a monthly zero based budget giving every dollar she earned a specific job. She also switched to an online bank instead of a traditional brick and mortar. They offer a much better interest rate on your money than a traditional bank. Reporter: Finally she re-evaluated her spending mind-set putting her money towards experiences instead of purchasing items like coffee and lunch. That's been really great because I've been able to be intentional with my finances and do things that I truly enjoy like traveling. Reporter: Now debt-free Cindy says she plans to continue to live frugally so she can focus more on investing. I know now that the sky is the limit. Yes! We love this. Well done, Cindy. One thing that helped Cindy was refinancing at a lower interest rate. Just so you know this isn't always the best move. It can help you save money over time by lowering the amount you owe and consolidating loans but sometimes the costs outweigh the benefit because of the associated fees. They can be high so if you're considering this option be sure to ask about those costs, those fees and if there is a teaser interest rate, be clear about what happens once it expires or if you miss a payment. Michael, if that rate goes up or those fees exceed what you're saving it doesn't necessarily make sense to refinance. Makes no sense and to see she paid $24,000 and only 4,000 went to the principal, that could be demoralizing. Congratulations to her. $215,000 gone. That's right. Rebecca, thank you so much and
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