Are you interested in paying off your student loans early? You’re not alone. Student loan debt is a burden that weighs heavy on many graduates, and it’s only getting worse as the cost of college continues to increase. Here are some tips for paying down your student loans faster than you might have thought possible.
Get a side hustle.
If you have a free hour in your day, use it to make some money! There are so many ways that you can earn extra income on the side. You need to find what works for you and stick with it.
Start by listing all of the hobbies or skills that you have. Then think about how these activities can be monetized from home! Like if you love yoga but don’t want to practice at a studio anymore? Create an online yoga class through live streaming platforms. Enjoy cooking? Sell them as dinner dates/cooking classes via social media platforms like Facebook. Know a lot about cars/fixing things? Offer your services through Craigslist.
You get the gist! There are so many ways to make money on the side while still having a day job. The key is creating multiple income streams, monetizing your passions, and making sure you’re passionate about it to keep at it for years to come! You don’t want this second job to feel like another “job” in itself, but instead, something that will fuel more fun & freedom throughout life.
Consolidate your loans. Find out if you qualify for loan forgiveness.
For example, if you have $40,000 in student loans and can consolidate them into one new loan with a lower interest rate so that your monthly payment is only $300/month, this will save you money each month on the accruing interest your debt. However, it’s important to note that not everyone qualifies for consolidation or refinancing options.
Another essential step to paying off student loans is looking into loan forgiveness programs. Loan forgiveness options vary depending on your career, but make sure you don’t stop searching until you find a program that will help lighten the financial burden of your debt in exchange for public service for a specific period.
You may also be eligible for Public Service Loan Forgiveness (PSLF). This program forgives federal student loans after consecutive years of full-time employment at an approved public service organization, including military service. The length of repayment depends on the amount owed and making 120 qualifying payments while employed by an authorized employer.
There are also loan forgiveness options for teachers. This program forgives federal student loans after consecutive years of full-time employment at an approved public service organization, including military service. The length of repayment depends on the amount owed and making 120 qualifying payments while employed by an authorized employer.
Refinance your student loan debt.
There are two types of refinancing. The first is private student loan consolidation or refinancing, which means you refinance your debt with a company other than the lender who gave it to you. This can potentially save money on interest rates and fees but comes at the cost of privacy.
If there’s negative information in your credit history that could affect your ability to get approved for this option, consider using alternate options like income-driven repayment plans instead.
The second type allows borrowers to consolidate federal loans into one new loan through an existing program known as Income-Based Repayment (IBR). IBR was created to help students struggling under their financial weight so they don’t default on their loans by allowing them to lower monthly payments for some time.
IBR also counts as a type of student loan forgiveness in the sense that, after 20 years for undergraduate students and 25 years for graduate school students, any remaining balance is forgiven.
Consider an income-driven repayment plan for federal student loans.
This type of plan calculates your monthly federal student loan payment based on a percentage of your discretionary income and family size. It’s essentially an extension offered to borrowers who can’t afford the standard repayment plans that the government provides.
Borrowers should remember, however, that these programs are not permanent fixes for excessive student debt. In addition, they all have caps on how long students must repay their debts through them, meaning they will eventually have to switch back to another repayment plan.
The following are some steps to take when paying off student loans early: Consider refinancing private or federal loans with one lender as a way to lower interest rates.
Even borrowers with good credit should take the time to compare lenders and see what type of repayment plans they offer as an incentive for refinancing, along with any fees associated with your student loans.
Consider consolidating federal student loans into one big loan. If you have multiple federal loans from several different lenders, it will be easier to pay off your student loans early. Just remember that if you choose a variable rate loan (one with an interest rate that changes over time), the rates could go up. In addition, the balance on your consolidated federal student loans may increase in size depending on how much they fluctuate.
Make extra payments on your loans to pay them off faster.
Figure out the total amount of money that you would save by refinancing your loans. Transfer all or some of your federal student loans to a private lender willing to refinance them at lower interest rates (usually about 0.25% less than what you’re currently paying).
Student loan payments are due at different times throughout the month. Make sure you are setting up your payments to be automatically deducted from a bank account so that they will not slip through the cracks.
Use an online calculator or app to determine how much extra can afford each month and make additional student loan payments accordingly.
Consider refinancing private or federal loans with one lender. This option is available for both Federal Student Loans and Private Student Loans, but only if borrowers meet certain repayment conditions, such as having good credit scores that qualify them for lower interest rates than their current ones.
Making extra payments on your loans to pay them off faster should also be considered when trying to eliminate debt quickly since this works towards paying more of what you owe each month rather than less.
Apply for deferment or forbearance if you can’t make payments due to unemployment, illness, or other reasons.
Apply for deferment or forbearance if you can’t make payments due to unemployment, illness, or other reasons. These are options that allow you to postpone your loan repayments. Another option is consolidation which will reduce the total amount of interest paid on a student loan.
These are options that allow you to postpone your loan repayments. Another option is consolidation which will reduce the total amount of interest paid on a student loan. If you’re struggling with late payments, contact your lender immediately, and make arrangements if possible. The best thing to do in this situation is to figure out what went wrong and strategize on how to avoid this in the future.
If you’re struggling with late payments, contact your lender immediately, and make arrangements if possible. The best thing to do in this situation is to figure out what went wrong and strategize on how to avoid this in the future. Calculate when you will be debt-free by determining how much money you can afford to spend on your student loans every month.
In conclusion
A borrower should make a plan in order to pay off student loans as soon as possible. Paying them early saves money and time, so calculate how much you can afford to spend on your student loan every month, then begin paying it back right away!
