Student loans are one of the first things that baby adults face after graduation. The thought of repaying your student loan can be daunting especially when it’s super expensive. But don’t fret, there are many ways in which you can repay your student loans faster than the usual. Below are some tips on how you can repay your students loans and finally lead a life of true financial independence.
There are several repayment plans available, providing the flexibility you need. These repayment plans can help you repay based on your current financial status. You’ll be asked to choose a plan. If you don’t choose one, you will be placed on the Standard Repayment Plan, which will have your cash loans paid off in 10 years. You can switch to a different plan at any time to suit your needs and goals. Your monthly payment can be based on how much you make.
Make more than the minimum payment
This is one of the easiest ways to reduce your debt. Just take the payments you have and add extra money to the payment. You should already have payments set up, so anything extra goes straight toward your principal. One easy way to do this: Set up automatic payments with this extra amount added in. This takes any indecision out of the equation and makes it harder for you to change your mind, too. Even if you can only afford an extra $20 a month, it’s something. Start there, then gradually work on increasing your extra payments.
Use the Repayment Estimator
The Repayment Estimator can help you figure out which repayment plan is best for you. Log in and pull in relevant information such as your loan amounts, loan types, and interest rates. Just enter some additional information, such as your income and family size, and your results will show what your payments would be under each repayment plan.
Consolidate and refinance
Refinancing your loans is one of the best moves out there for paying off student loans faster. The goal of refinancing is to decrease interest rates, meaning more of your payments go toward paying down your student loans. When you refinance multiple student loans, you’ll get one consolidated loan with one monthly payment. Alternatively, you could refinance just one student loan for lower rates. You’ll likely only want to refinance loans where you can actually decrease your interest rate.
Pay off your private loans first
If you have any private loans, pay those off first. The interest rates are usually higher than federal loans so the sooner you can pay those down the less money you’ll have to fork over for the life of the loan. Another reason to pay off your private loans first is that the interest rates on them usually aren’t fixed and can increase. Consequently, you’ll end up paying more.
Be frugal and earn more money by doing side hustles
One of the easiest ways to increase money available for paying your student loans is simply spending less money on other stuff! For ideas on how you can win the war on your student debt, identify your strongest suits and invest in them. Obviously, the more money you make, the more money you can direct towards paying off your student loans. The two best ways to increase your income are to 1) ask your boss for a raise and 2) start a side hustle. Any extra money you earn each month goes right to paying off your debt. Freelance or sell some of your unused things for a better result.