Student loans debt is becoming a more serious problem than ever. Currently, it’s the second-highest consumer debt category - over 45 million Americans owe $1.6 trillion in student loans. Many of them will not be able to pay it off, until their 30s or even 40s. If you want to avoid such a situation, make sure to use those six strategies, which will help you pay off your debt faster.
Biweekly Payments
The easiest strategies are always the most efficient and biweekly payments is the best example. In general, people pay off student loans installments once a month. Monthly payments are of course, convenient, but when you pay off every two weeks, your debt will be gone faster. Thanks to this simple method, you’ll be able to make an extra payment every year, and that means you’ll be able to pay the debt earlier, which you should always try to do - the longer you have it, the more it will cost you.
Start Paying Off As Soon As Possible
Make payments before the interest goes up. A lot of loans have a particular period when interests don’t accrue. When it comes to federal loans, they usually have a six-months period when interest won’t be racking-up. The grace period will often occur right after your graduation, so make sure that you make good use of this time, and pay as much as possible. Look for a job when you’re still at university so that you can start working immediately after you finish studying.
Come back home after College
Of course, it’s not possible for everyone, however, if you have a chance and your parents don’t mind, move back in. Living with parents has a lot of cons, and you surely know what they are, but it also has a lot of pros. You should suggest that you split the bills or other fees, but the chances are that your parents won’t need additional money. In such a case you’ll be able to save up almost 100% of your salary. Saving money on rent is a game-changer, but savings that you can make on utilities are even higher.
Refinance When You Have A Good Job And Credit
Recently one of the most popular ways to pay your student loan faster is to refinance it. Unfortunately, there are some requirements. You’re going to need a decent history. If you were never late with payments, and have a good, steady job, then the chances are you’ll be able to refinance your debt. In general people in high 600s can get it without any problems. Fortunately, there are options even for people with no history or bad credit. One of them is personal loans for people with bad credit. Some people believe that going for loans with no credit check is better, but remember that checks are essential - it’s not only a way of checking your trustworthiness, but it also prevents you from falling into a debt trap.
If you don’t have much knowledge about loans, you might be wondering what refinancing is. It’s basically replacing your multiple student loans with a private loan that has lower interest rates. Depending on the amount of your debt, it might save you a lot of money. When you have $50.000 loan, and its interest is 8.5% you might save around $10.000 when you refinance. It happens because the payments are pretty much the same, but you pay much less interest.
Pay More Than The Minimum
Every month there is a minimum amount of money that you are obligated to pay. But what if you could pay more? It’s the most effective way to help you pay off student loans faster. Of course, it’s easier said than done, but make sure to save as much as possible, and use it for repayments. At first, it’s going to be hard, but once you get momentum, you’ll easily be able to find extra cash every month. Plan your budget, and make a list of the things where you could save some. It doesn’t have to be much; just keep in mind that every dollar brings you closer to being debt-free. Of course, make sure that these extra payments are applying to your loan principal.
Find A Job That Will Help You Pay Off Your Loan
Employers are looking for loyal workers, and they try to attract them using different methods. Some companies will help you with student loan assistance or forgiveness programs. Maybe you could find one, that will help you get rid of this financial trouble, and on top of that get valuable experience in the industry where you always wanted to work? When you’re looking for a job, make sure that you take this factor into consideration.
Strike Out Your Student Loans
Student loans can become an overwhelming burden; that’s why you have to make sure to get rid of them as soon as possible. Make sure to implement these strategies, as they are the most efficient methods to help you pay student loans faster.
