Are you stressed about paying off your student loans? If so, you are not alone.
Student loan debt in the United States totaled 1.5 trillion dollars in 2018. In fact, the average 2016 graduate owes $37,172 in student loan debt.
As colleges continue to raise tuition rates, students continue to borrow more to finance their education. Paying back your student loans may seem like an impossible task, but it is doable.
If you are worried about how you will handle paying off student loans, we have some answers. Read these tips for paying off student loans faster.
Keep Living Like a Student
Graduating from college may make you want to start living like an adult. But it’s okay to keep living like a student while you save some money.
If you have your first real job, you may be making more money than before. But it’s a good idea to put off major purchases and instead focus on living frugally while you start paying off your student loans.
Keep living like a student for a while, and save some cash for later. If you have roommates, you may want to keep them instead of getting your own place.
Even better, live with your parents and start paying off your loans and investing your money. Instead of using your new salary to inflate your lifestyle right away, be smart and start paying down your student loan debt right now.
Start Paying Down Your Loans While in School
If you are still in college, you can start paying your loans off now. Even if you aren’t making much money, you can pay small amounts toward your debt.
If you aren’t working, think about getting a part-time job so you can have some extra spending money while you get started paying down your debt. Some student loans accrue interest while you are still in college, so it makes sense to start tackling your debt right away.
By starting to make payments while you are still in school, you can pay off your student loan much faster.
Refinance High-Interest Loans
In some situations, it is a good idea to refinance your higher interest loans. This isn’t the right solution for all, but many students save money and shorten the length of repayment by refinancing their student loans.
For some, this is a way to pay off their student loans quicker while saving money. You should be careful about refinancing federal student loans with a private lender.
In this situation, you forfeit any federal perks such as deferment, forbearance, and income-based repayment.
If you do choose to refinance, make sure you are getting a lower interest rate. If not, it does not make sense to refinance your student loans.
Get a Side Hustle
If you have graduated and have a good job, that’s great. If you are young and have no other responsibilities, you may want to consider getting a part-time gig.
You can make a huge dent in your debt with the extra cash. A side hustle doesn’t have to be a traditional job.
There are many ways you can use your unique skills to make extra money. You can try freelancing or even start your own business.
Boosting your income is the best way to hit your student loan debt.
Pay More Than the Minumum Payment
The minimum payment is the lowest amount you can pay on your loan. If you only pay the minimum each month, the balance of your debt will not change much.
If you want to pay down your debt, you must pay more than the minimum each month. In fact, you should pay the highest amount you can.
You could take it a step further. Consider using graduation gift money, birthday money, money from grandma, etc. to pay toward student loan debt.
It may seem painful to pay a lump sum toward your debt, but it will pay off for you in the long run.
Make More Than One Payment Per Month
If you are serious about paying off your student loans as soon as possible, consider making more than one payment per month. You could pay bi-weekly or make payments throughout the month.
You may not be able to do this every month, but each payment you can make will make a difference. Although it may not be fun to spend your extra cash, you will love watching your student loan balance go down little by little.
Making extra payments helps you pay down the principal of your loan at a faster rate. This could speed up the payoff date by several months or even years.
Look for a Job With a Forgiveness Plan
Some businesses attract capable employees by offering loan forgiveness. That means your boss agrees to pay off a portion or all of your student loan debt.
As you look for a job, check to see if any companies in your industry offer forgiveness plans. If your job does not have a forgiveness plan, it doesn’t hurt to ask.
As you negotiate salary, ask your boss if he or she is willing to help with your student loans as part of your benefits package. Remind them that many businesses do this to support quality employees.
Choose an Automatic Payment Program
It’s easy to put off or forget to write a check each month to pay your student loan debt. Instead, consider enrolling in an automatic payment plan.
This makes it easy to pay and track your payments online. And you can always make extra payments if you want to.
The best part of automatic payments is that you don’t have to remember to do it, and your payment will always be on time.
Consider the Military
Joining the military isn’t for everyone, but it’s a smart decision for some. Joining the military can help you with your career and your finances.
They will put you through college or pay off your student loans. You receive a salary and a place to live as you serve your country.
Even staying in the military for a short period of time can be beneficial. And you will gain experience that could translate to a high paying job down the road.
Don’t Ignore Paying Off Student Loans
This may seem like obvious advice, but many people fall into this trap. Do not default on your student loans.
Do not assume the debt will disappear. It will stay with you and could later hurt your credit and keep you from making important purchases.
Paying off student loans may not be fun, but this responsibility won’t go away.
You made a promise to pay back your student loans, and you should honor that promise, if possible. That’s just a good lesson for life in general.
Be sure to check out our informative blogs and helpful advice on making the most of your money.