While we can’t put a price tag on a good education, it’s inarguable that the bid is too high. A notable percentage of graduates today admit to struggling with the burden of their federal student loans, which, however valuable, perilously puts their income under strain. Student loan debtors often find themselves weighed down by this, which forces them to constrict their budget, lifestyle, and financial potential with some taking out more credit to balance things out. Fortunately, there are efficient alternatives around this situation- paying your loan faster.
Tips For Repaying Your Student Loan Fast
Below we explore five strategies to help accelerate student loan debt shed, so you don’t have to stay in debt longer than you have to.
1. Start Right Away
We know how tempting it is to sit out your grace period but take it from us; the sooner you start your repayment, the better. Do not hesitate to pick up an extra shift or side hustle to cover that monthly interest or principal before the grace period lapses; this’ll save you a lot of financial strain. If you’re past this, starting right away will serve you just as much; make the initiative to make partial payments toward your debt, capitalizing your efforts on clearing the interest first to prevent it from accruing, and then tackling the principal right after.
2. Refinance For Lower Interest
Consider refinancing to score for a quick loan payoff. You may not know this, but revisiting your student loan agreement with your creditor could amend your interest rates while affording you more payments through a refinance loan. Ideally, what the refinance loan does for you, is work to pay off your student loan debt on time, leaving you with a lower interest rate loan and more time to get your finances in order before the new payment rolls in.
3. Try Automatic Debit
Did you know that signing up for an automatic debit payment sheds your interest rates while putting you in favor of discounts of up to 0.50%? Yes, letting your student loan servicer automatically deduct repayment from your bank account every month awards you an interest rate reduction which ultimately trickles down into lower debt balances. But wait, there’s more; some creditors go as far as providing discounts to clients who enroll for the program; in the long run, this guarantees you timely debt repayments and a cut-down debt balance that you can quickly pay off.
4. Top The Minimum Payment
Remember, you don’t have to stick to the agreed fixed payment. If you want to break free of your student loan debt sooner, bumping your minimum payments will go a long way. Rather than settling for the slower route that allows you to pay the minimum monthly amount, opt to pay extra to shave off your installments. Before taking on this strategy, you should reach out to your loan servicer to ensure that your payments are allocated to your principal balance and interest, not future bills.
5. Pull From The Cash Windfall
Have you been lucky enough to earn a work bonus or an inheritance? Commit to channeling those funds toward your student loan debt repayment rather than spending it on something fun; this decision will help propel you further toward debt clearance. That aside, paying this debt forward will set you up for those rainy days when you can’t meet regular payments, so you don’t have to worry about your loan’s interest accruing.
Summing up
Paying off your student loan is a huge milestone, and while the process is never easy, it is ultimately worth it. Less credit baggage on your plate empowers you to make financial moves and decisions that propel you toward your goals; that said, there’s no better time to rid yourself of that student loan debt than now. Create a strategic plan and consciously commit to either of the mentioned tips for a quick way out of your student loan credit.