Top Ten Tips to Pay Off Your Student Loan Quickly
Mandy Mac
“How we are going to pay off our student loans?” seems to be a question that is currently circulating rapidly. There are many ways to get your loan paid down swiftly that you may not have been aware of, until now. Here are our top ten tips to pay off your student loan and quickly!
- Make payments while you are still in school. Beginning to put money towards your loans before you graduate will help you pay them off faster. You are better off beginning to pay as soon as possible, rather than waiting. Any payments you make while you are still attending school, or during the six-month grace period, will lessen the interest capitalization and can save you money in the long run! Just check with your loan service to be sure there are no repayment penalties.
- Income based repayment plan. The Department of Education has a program to help manage student loan debt by reducing monthly payments. These payments are determined by your annual income from the previous year. It is definitely worth a look into if you’re an individual with a low income, or someone who is curious to know if you can lower the required monthly cost of your loan.
- Get help from your employer. Some employers offer assistance with your student loans. There are some private companies that have their own existing programs (ask your HR representative). However, there is multiple foundations and programs that will assist people who work in specific field, such as education, medical, and government. These programs will reward their employees who work for them two years or more with $10,000 to $50,000 just to pay off their student loans.
- Pay more than required each month. This is the best way to pay down a loan fast. When you make loan payments, you pay off any interest that has accrued since your last payment. The rest goes to lower your principle balance. If you pay more than required, the extra money will go straight to lowering your loan’s balance.
- Switch to bi-weekly instead of monthly payments. Paying more than once a month will knock your interest down and lower the general loan’s balance. Doing this lessens the time between payments, therefore limiting the accumulation of interest. This is a great idea if you get paid bi-weekly. Just schedule yourself to deduct from your paycheck to your loan.
- Take advantage of tax deductions. Your student loans can be a tax deduction based on your income and whether you are claiming alone or not. However, when you get refunded, consider putting majority, or all of the extra money towards you loan.
- Volunteer. There are volunteer programs that offer education awards or partial loan cancellations when you join and actively work in their organizations. Zerobound is a program that provides an innovative option to reduce student loans for graduated students. Zerobound connects volunteers, organizations, and sponsors together on one platform to support each other. The programs helps graduates whom are either seriously struggling with their debt or only require some assistance with their financial relief based on their volunteer work.
- Make financial sacrifices to meet your goal. Timeline and budget yourself appropriately. Limit the amount of time you go out, shop, and spend money. If you are a graduate working full time and living at home, now is the perfect time to take advantage and save for your future all while paying off your student debt.
- Leave your credit card at home. Make it a new rule for yourself to only spend money if you have the cash on you. We tend to just use our credit cards without realizing the amount of money we are actually spending. This will help you rethink your purchases and stop yourself from buying expensive merchandise. For example, getting a new car would be wonderful and look great, but not being in a lifetime of debt is even better.
- Pay off the highest-interest rate loan first. You are paying the most on those loans, so you will want to get those paid off right away!
