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Thursday, September 26, 2019

How to Pay Off Student Loans Fast

Debt sucks. It really does. Here's some tips from a reader on how to pay your student loans off quicker.





It cannot be denied that student loans are among the most stressful aspects of being a student. It can affect you emotionally, which can possibly affect your studies. Well, don’t let your student loans take over you. The following are essential tips on how to pay off student loans faster.


Student Loans Refinancing

By refinancing your student loans, you can get a loan that has less interest rate. You can also protect your federal student loans and use the income-driven repayment plan.

Pay more than the minimum amount

One of the most effective ways to pay off your student loans is to pay more than the minimum amount. It can reduce due to the remaining amount and its interest. You can also schedule a monthly payment more than the minimum, so you can easily eliminate your debts in a shorter period.

Pay off first the loans with high interest

Different student loans come with different interests. With this, you can pay off first the ones with a high-interest rate. Thus, it can save you from your total interest. It will help you to ensure that you are paying down your student loans in the most strategic way.

Consider Interest Rate Reductions

Some student loan service providers can offer you with interest rate deductions if you are setting up auto-pay. On the other hand, some also decrease the interest rate after you made several on-time payments. So, you must take advantage of the interest reduction programs from your lenders.

Make a budget plan

Just like any other thing, first things first. It is essential to make a budget plan to eliminate your student loans as much as possible. Include in your budget the student loan repayment. With this, you can have more balance in your spending habits and reduce the stress brought about by your student loans. It is natural that you can be stressed with your debts, so you must do something about it.

With a budget plan, you can learn to manage your money on your different needs, so you can have enough amount for paying your student loans on time. You must set a budget plan for your basic needs, including your food, housing, and other utilities. As you learn to save and budget your money, you can be surprised at how low your debt will be.

Find an extra income or a part-time job

If you have a leaner budget, another solution is to find a part-time job to earn an extra income. With this, you have additional budget for your student loans and other basic expenses. With your extra income, you can pay your balance faster which can offer you peace of mind.

Prevent extended repayment terms

Some federal student loan repayment programs can expand the time for paying off your loan. You must avoid it so that you can pay your debt faster. Additionally, extending the payment terms can also stretch your interest rate.

Take advantage of tax deductions

As a student, you can have a tax deduction about $2500 loan interest on a yearly basis. With student loan interest tax deduction, you can reduce tax payment.

Sign up for autopay

Signing up for autopay can reduce your interest. Your loan provider can deduct your payment from your bank account on a monthly basis. The benefit of considering autopay is that you can’t miss a payment and you can always pay on time. You can also have some discounts.

Educate yourself about your finances

Do you want to pay off fast your student loans? Then, educating yourself regarding your finances is a must. You can increase your motivation by learning the essential things of managing your money. You must have self-control when it comes to spending your money on different things.

Reward yourself

Pay off your student loans by having the motivation of rewarding yourself. You can pay off your loans faster if you are motivated by a goal. Make that goal a reward to yourself, so you can eliminate your debt as much as possible.

Use the points of your credit cards

You can also use the points of your credit cards to get a discount.

Use found money

As you found money, you can use it to pay your student loans. Every amount counts, so you must consider making money even a small amount. For example, if you get a bonus or raise in income, you can make use of it to reduce your debts.

Focus on your repayment plan

Making a repayment plan for your student loans is not enough. It is important to apply and stick to it. If you can’t afford to pay high amounts, you can prefer paying small amounts on a regular basis. Sticking to this repayment plan will slowly but surely eliminate your student loans.

Consider biweekly payments

The best and effective technique to reduce your student debt is to opt for biweekly payments. You can pay half every 2 weeks than paying it on a monthly basis.

Volunteer

Some organizations can provide student loan repayment assistance in exchange for volunteering for nonprofit projects. You can use it to settle your student loan payments while helping the community.

Pay your student loans based on your personality

If you have many student loans, you can invent more innovative strategies that are based on your personality. There are 2 payment options which can suit your personality, the debt avalanche, and debt snowball.

In the debt snowball method, you can pay the smallest balance first. With this method, you can be encouraged and motivated to pay since you can see effective results. On the other hand, you can also use the debt avalanche method wherein you can pay the highest interest rate first on a monthly basis. This is somewhat similar to payday loans, but more manageable.

Paying off your student debts faster is possible. You just must apply discipline and efficient techniques to pay your debts in a faster and hassle-free way. With this, you can focus more on your studies and eliminate the stress and worry from your financial burdens.

See my disclaimer.

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