8 Tips For Paying Down Student Loans
1. Don’t ignore your student loan debt.
Just because you’re avoiding the debt doesn’t mean it doesn’t exist! Avoidance can lead to severe consequences like delinquency and default; both can leave your credit score in shambles. Besides, default can lead to your wages being garnished and tax refunds seized by the government.
2. Know the details of your loan debt.
Knowing the details of your lender’s information, loan balance, and repayment status is essential when paying off your student loan debt. You can access federal loan information at www.nslds.ed.gov. For private loans, look for related paperwork you signed or contact your college or university.
3. Know the repayment options and their guidelines.
Most loans, both federal and private, offer multiple repayment options. Read over your options, including all fine print before choosing. Keep in mind that while extending the length of your loan will lower your monthly payment, the loan will cost you more through the interest in the long run. Options such as income-based repayment and related income-driven repayment options should also be looked at.
4. Pay more than the minimum payment anytime you’re able.
Be willing to sacrifice some comfort now to pay less in interest overall. When you have any amount of extra money, put that money towards paying off your loan debt. You’ll thank yourself later.
5. Start by paying off the most expensive loans.
It might seem obvious but if you have multiple loans, begin by paying off the most expensive ones first. Don’t avoid other loans but put any extra amount you can afford into paying off the highest interest rate loans first.
6. Consider consolidating or refinancing your loans.
If you’re struggling with multiple student loans, look into consolidating or refinancing. Consolidating and refinancing allow you to pay off the various debts with one loan, leaving you with only one payment to worry about. Consolidating and refinancing can also give you access to lower interest rates than you have currently.
7. Look at loan forgiveness programs.
Usually involving government or non-profit employment, loan forgiveness programs can offer you relief from all or a portion of your loan debt, in exchange for work. Before deciding to take part in a forgiveness program, consider all employment options. It might be smarter for you to take a higher paying job somewhere else instead of going with a loan forgiveness program. Carefully read all details of these programs.
8. Find other ways to save and earn income.
Besides putting yourself on a budget, research other money-saving or money-earning opportunities. This could mean not taking that vacation this year or perhaps taking a second job. Spend smart and budget accordingly.
A Final Word
Approach your student loan debt as a challenge. Come up with a plan and strategies to stay on the path to repayment.
If you’re nearing default or can’t handle your loans suddenly, consider one of our personal loan options. Regardless of your credit history, you can quickly get the money you need to manage your loan payments.