According to Pew Research, as of March 2019, Americans owed about $1.5 trillion in student loans. This figure keeps increasing as the years pass by and as the cost of education keeps on going high. People who are not financially stable end up applying for student loans to help with college fees. They also agree on a repayment plan after graduation.
It can sometimes be a bit strenuous paying these loans. However, with the right plan, you can comfortably repay them.
Here are some strategies you can use to repay your student loans.
Do you want to clear your loan faster? Make additional payments. Each time you are paying the loan, make sure you add some extra amount on the standard payments. Think of all the spare change you get after shopping that you don’t factor in your budget. That extra coin will make a big difference. Think of an added payment of 10$ per month; this translates to 1200$ annually. That way, you will reduce your repayment and interest period.
Refinance the loan
If you have a stable income and good credit score refinancing your student loans is something you should consider. When in school, you probably didn’t have a good credit rating, but it has since changed. If you decide to refinance, you may get better repayment terms which may end up saving you a significant amount of money.
Find the best student loan refinance options at Crediful to help you choose your preferred lender.
With a refinancing, you can consolidate multiple student loans to have one loan, which is easy to monitor and pay.
When you are paying the loan, make sure you stick to the standard payment. If you cannot afford to add extra cash on the loan at least make sure you pay the minimum of your payments. If you miss payments, it affects your credit score and could affect your future borrowing.
Do you want to get this loan off your shoulders? Find a side hustle. By doing so, you have more income. You can dedicate at least 50% of the amount you get in the side hustle to pay the loan. Find something you can do that don’t need a lot of capital to start. Having extra income helps ease the burden quickly.
Continue the college lifestyle
Yes, I know how much you longed to finish college. I also know I sound insane by telling you to continue with the lifestyle. But are you dedicated to paying your loan, right? Living the college lifestyle will help you to save a lot and hence pay more loan. Trust me; it’s all worth it. Once you are done paying the loan, you can go live the life you always wanted.
If you had a roommate retaining them would be a good idea. That way, you will share rent and save some cash in that. Also, avoid eating out as much as possible. It will help you save some money to help pay your student loans.
Paying more than once per month
An example if you pay 400$ per month, if you have a steady income, you can pay the $200 every two weeks. A year has 52weeks if you pay after two weeks you will have paid 13 months that way you have paid an extra month. Also, you won’t feel the weight as much.
By paying at least after two weeks, you won’t save much but its still something. When you use that method over the years, it will help in completing the loan earlier than before hence saving some cash.
Use that extra cash you get to pay the loan. You know that money you get which you didn’t expect? It could be a birthday cash reward or a job bonus. Use that amount to pay the loan.
Consider automatic payments or your loan. Most lenders offer a discount to those using autopay. Leave alone the discount. You are sure you will never forget to pay the loan.
Ask for help
Yes, you read it right. Ask for help from your employer. I know it’s scary to even think of it, but give it a try. The good thing is the worst that can happen is them saying no.
For those working in government offices, some programs are there; an example is a public service loan forgiveness program. They forgive loans if you have made 120 payments and if you have remained employed by a qualified public employer. So ask for help it’s there.
Paying your student loan is a good step and a good beginning for your financial life. The earlier you pay off your loan, the better. You will be able to save for more investments. Paying off your loan during your first years after graduation is smoother because responsibilities are not as much, and it’ll leave room for you to invest in the future.