A huge percentage of students and graduates struggle to pay back their student loan debts. The average student loan debt in America is a whopping $37,172, and research has shown it takes the average 4-year degree holder almost 20 years to pay off their loans! Being in this situation can feel overwhelming and stressful. If you are wondering how to pay off student loans quicker there are a couple of methods to consider that can help you out.
Pay More Than The Minimum Payment
If possible, and if you can afford it, try and pay back more than the minimum monthly payments every month. Paying back larger amounts will help cut down on the principal balance quicker, which will help lower the interest you accrue and will help in minimizing the duration of the loan.
This doesn’t mean trying to pay back double or triple the amount you owe; even adding $50 over the minimum can be beneficial in the long run. You can also try to add in payments, such as paying back twice a month instead of once. If you try this strategy, make sure the additional payments are getting applied to your loan principal and are not getting placed in the ‘paid ahead’ status.
Paying During The Grace Period
Student loans usually have a grace period that lasts until 6 months after graduation. To make loan repayment as fast as possible, try and make payments during this grace period as well. Other than direct subsidized federal loans, most loans also start accumulating interest during the grace period.
To make sure you aren’t accumulating any extra interest and you finish off loan repayments as quickly as possible, start making payments during the grace period. It will help in reducing the principal payments, and you will not have to pay back any interest accrued during the grace period.
Utilize Any Loan Forgiveness Programs You Can
There is no repayment plan faster than having your student debt canceled! There are hundreds of various student loan debt forgiveness programs you can apply to.
There are loan forgiveness programs for government officials, healthcare workers, disability forgiveness, etc. You should also check with your current employer if they run any programs to help with student loan repayments as well.
Getting your student loans forgiven might seem too good to be true, but these programs are very real. When considering a loan forgiveness program, it’s best to do your research to make sure you’re not a victim of a scam. If you think you qualify for any kind of forgiveness program, make sure to apply for it.
Consider Consolidating And Refinancing
If you have an excellent or good credit score, you should consider consolidating your student loans and refinance. Refinancing basically means that you consolidate all your loans into one, take out another loan from a single lender to repay your original loan, and then you pay back monthly to a single lender.
Do this only if your credit score and your current student loan interest rates are high. You probably weren’t in a good financial position when you first applied for your loan, but refinancing could get you lower interest rates and shorter repayment times if you have built up your credit score.