Faster Ways To Pay Off Student Loans
Student loans can be a huge burden. If you’ve recently graduated and have student loans, you may find yourself with monthly payments that are more than you can afford—especially if you are starting your first job. However, there are tactics that can help lighten the load of your student debt while also paying it off more quickly.
Pay more than the minimum.
If you’re able, you should always pay more than the minimum amount due on your student loans. This can be painful at first, but it will help you get out of debt faster and with less interest paid overall.
If you’ve been making small payments on your loans for years, consider how much faster you could pay them off if you were to increase your payments by $50 a month or so each month until they were paid off in full. Even if we assume that this would result in higher monthly payments (because interest rates are higher), it’s still likely that paying this way would save money over time compared to paying only the minimum amount due on each loan every month for decades.
Use a student loan calculator and set goals.
Use a student loan calculator to find out how much you owe, and how much you will pay over time.
Set goals for paying off loans.
- Set a goal to pay more than the minimum payment.
- Set a goal to pay off your loans before you retire
Avoid forbearance and deferment.
If you are struggling to make your monthly payments, it’s tempting to take a deferment or forbearance. Don’t do that. Both these options can increase the amount of interest you pay over time.
Deferment is when your loan is temporarily put on hold and you don’t have to make payments for a period of time (usually one year). But if the interest continues to accrue during this period, it may become more expensive than making payments each month. If you can afford to pay off part of your loan while in deferment, then do so—it will help reduce how much interest accumulates during that time period and save money in the long run.
Refinance your student loans to get a lower interest rate.
If you’re like most Americans, you probably have some student loans to pay off. And while they aren’t exactly fun to deal with, there are ways to make the process easier and faster.
One of those ways is by refinancing your student loans. As long as you meet certain requirements, refinancing can help you lower interest rates and save money on monthly payments—which means more money in your pocket every month!
What Is Student Loan Refinancing?
Student loan refinancing is when someone takes out a new loan or line of credit in order to pay off their existing debts at a lower interest rate (or rate of interest). This usually happens when someone has already paid off some portion of their debt but still has a balance owed on their original loans that hasn’t been fully paid yet; this is called “high yield” debt because it can be sold for a profit after paying back an agreed-upon amount over time—in this case, usually something like 15% annually until all obligations have been satisfied—which can then be used towards repaying any outstanding balances owed from other sources such as credit cards or personal lines of credit.”
Make bi-weekly payments instead of monthly payments.
Making bi-weekly payments instead of monthly payments can save you a lot of money.
When you make bi-weekly payments, your loan payment is divided into two parts: one that’s paid every other week and another that’s paid every week after that. This means you have 52 weekly payments instead of 26—and when you divide the total amount of money in each monthly payment by 52 instead of 26, it works out to be less than half as much per month! So while these smaller amounts might seem like they’re not worth investing in on their own, when added together over time, they’ll add up to tens or even hundreds times more than what was originally saved by switching from monthly to bi-weekly payments.
Accept a side hustle to earn extra money.
One of the best ways to earn extra money is by taking on a side hustle. A side hustle is a part-time job that you do in addition to your full-time job. It may be something like delivering pizza, babysitting, or dog walking.
In order for this to work, you need to make sure that the time commitment for your full-time job doesn’t suffer. If your side hustle does take away from the time you’d normally spend at work, then it’s probably best not to do it at all since there are other ways of earning extra income that don’t require this sacrifice (more on those later).
These recommendations can help you pay off your student loans faster.
- Pay more than the minimum.
- Use a student loan calculator and set goals.
- Avoid forbearance and deferment.
- Refinance your student loans to get a lower interest rate.
- Make bi-weekly payments instead of monthly payments.
- Accept a side hustle to earn extra money
If you have student loans, it’s important to know that there are ways to pay them off faster. You don’t have to struggle with debt for the rest of your life! Use these tips and tricks to start paying down your student loans so that you can be free from debt in no time.