Student loans are one of the most common forms of debt for Americans. Many people struggle to pay off their debt acquired from obtaining a college degree for decades after they graduate. To avoid holding the weight of thousands of dollars of debt on your shoulders for many years to come, look to the five methods below to help you pay off your student loans faster.
1. Stop Only Paying the Minimum Payment Each Month
The most common reason people have their student loan debt decades after they graduate is because they only pay the minimum amount owed each month. This minimum amount owed should not be looked at as “how much you must pay,” but rather as a true minimum amount to spend. It may be easier said than done, but try to exceed your minimum amount every month. Rework your budget and find ways to save money so you can put it towards your student loan debt. Even if it is an extra $100 more each month, this will help to pay off your loans much faster.
2. Refinance Your Student Loans
A way to possibly save you money on your student loans is to refinance them. Refinancing a student loan means taking out a new loan with a lower interest rate in order to save some money. Many people will also consolidate their loans if they have borrowed from more than one financial institution. In this case, they will take out a loan to pay off the other loans, and pay towards their new larger loan. This can help to make the debt more manageable and can help make the amount owed more clear. If you do decide to consolidate and refinance your loans, be sure it will save you money on interest or will make it much easier for you to pay the debt off.
3. Set Up Automatic Payments
One of the best ways to pay off any form of debt is to set up automatic payments. Many banks now offer automatic payments or savings. In many cases, you can set up an automatic savings rule to take a percentage of each deposit into your checking account. For example, you can automatically withdraw 20% of each deposit, and immediately put it towards your debt. This is a very low-maintenance way to pay off your debt each month as you don’t have to put much thought or calculations into your payments.
4. Look for Jobs That Offer Student Loan Forgiveness
An employee benefit that some employers offer is student loan forgiveness. After working with a company for so many years, some employers will pay off your student loans for you. This is more popular with government and public service jobs, but many employers from other industries offer this as an employee benefit. When you are considering different jobs, take a look at the employee benefits of each one, and see if student loan forgiveness is included.
5. Make Lifestyle Changes
If you truly want to pay off your student loans in a flash, the best way to do this is by making major lifestyle changes. For example, moving to a less expensive area of town and putting the amount you are saving towards your debt will be very effective. As well as changing which grocery store you shop at, or dining out less in order to have more to put towards your loans. This could even be cancelling your cable and sharing a Netflix account with a family member. When you want to get rid of your student loans quickly, evaluate where you spend the most money and make some changes. Once your student loans are paid off, you will be very thankful you made these changes.
Pay Off Your Student Loans
Although the number you see can be intimidating, it is possible to pay off your student loans. You will have to make some changes and put in hard work to get this accomplished quickly, but it will be worth it. If you have any questions about how to pay off your student loans, please contact one of our professionals. We will give you more tips and address any questions you may have.
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This article is for informational purposes only. Please be advised that this article is not intended as legal or tax advice or an offer of student loan debt forgiveness programs. PPG-139592 (11/19)(Exp. 9/20)