Many of us have them: the dreaded student loan debt that can last for years. However, this financial-guru-considered “good debt” can be paid off quicker with these helpful tips.
The first step to combat any debt, is to first set a budget. This will allow you to see what you make and what you are spending towards non essentials, so you can free up more money towards the things that matter. This is also the part where you should keep track of the total amount of student loans you owe.
Consolidating your student loans will give you just one set interest rate and just one set payment, which will make it easier to manage your payments each month. When consolidating your loans, check for programs with a low interest rate, and be sure your consolidation still carries forbearance and deferment options in case you run into financial trouble somewhere down the line.
Make Larger or Lump Sum Payments
Now that you have consolidated your student loans into one low interest loan, you will be able to make larger or lump sum payments towards your loan and see it go down even faster. Larger payments can be made by adding an additional 5 or 10 dollars etc. to your existing monthly payments.
Income Tax, Gift Money, and Bonuses
When you receive unexpected monies such as income taxes, gift money, and bonuses etc, try using a portion (about 10%-50%) of it to pay down your student loan debts. This way, you’ll be able to have your cake and eat it too, and you’ll feel better splurging on yourself, knowing that a portion of the money has gone towards your loan.
Look for Jobs with Student Loan Perks
There are select employers that pay half or more into the reimbursement of your student loans for as long as you are employed by them. Some government and military jobs will also pay a certain amount towards your loans each year, as long as you are still active. If you are planning to become a teacher, lawyer, or doctor etc. there are loan programs for public service jobs that eliminate your student loan debt after 10 years, providing you stay current on your payments.
Make Payments While Still in School
There is no rule against paying towards your student loans while still in school. If you are fortunate enough to have employment while still in school, use a portion of your income to pay down the interest on your loan. Don’t forget, a portion of your gift monies can also be used to pay down your loan interest while in school.
Paying off your student loans can be rewarding, after all, you are investing in yourself. To make paying your loans more adventurous, simply, make a plan and stick to it, then watch as the balance goes down each month! If you find yourself in financial trouble and are unable to make your payments, don’t hesitate to contact your loan company as soon as possible to avoid default and bad marks on your credit report.