Student loans have a way of taking away a massive portion of your paycheck before it even hits the bank account. If you want to pay off your student loans faster, you’ll have to upgrade your repayment strategy.
The most effective way to clear off your massive debts is to pay more than the minimum payment. That’s because the more you pay down the principal balance, the less you’ll pay in the overall interest.
That said, here are other effective ways to pay off your student debts faster.
1. Pay More Than The Minimum Payment
We’ve touched on this, but here we go deeper. The best and simplest method to pay off your loans is to pay more. Of course, that’s not something to say lightly. But whatever your situation, you don’t necessarily have to pay an extra $300 every month. If you can, great, go ahead.
But if you can only afford $30 or $50 every month, do it. Any amount you can pay over the minimum can help you clear off your student loans quicker. First, however, make sure that your loan servicer applies your extra payments to your loan principal.
With time, you can increase the additional payments. You can use a student loan payoff calculator to see how this option can impact the overall cost of your student loans, including the interest you’ll save.
2. Your Job Can Help Pay Off Your Loans Faster
There are few ways you can use your job to help you pay off your student loans quicker. However, several jobs offer student loan forgiveness. In exchange, you work in specific services like doctors, lawyers, nurses, public servants, etc., for particular years. You get your loans forgiven when you complete the years.
You can check if your career goals align with the requirements for each loan forgiveness program. If so, you can go ahead.
Some employers also offer student loan assistance programs as part of their benefits package. You can also take this into account as you search for your next job. If you already have a job, you can ask your current employer if they offer this type of benefit.
3. Consider Refinancing Your Loans
Refinancing is steadily becoming popular for borrowers with excellent or good credit scores and high interest rates. With a refinancing, you consolidate your student debts into one by taking out a new student loan with a private loan lender.
Then, use that loan to pay off the original student loan. This option helps numerous borrowers get lower interest rates because they’re more stable financially than when they took out the first loan. It’s an excellent option to get private student loan relief.
However, remember that you won’t have access to federal programs such as Public Service Loan Forgiveness (PSLF), income-driven repayment, etc.
4. Consider Autopay
Numerous student loan servicers offer a rate discount of 0.25% when you sign up for automatic payments. Yes, it’s a small amount, but it can add up over time and help you save money.
Also, autopay is generally a good idea. That’s because it can help you make your payments on time, thus, not getting in trouble when you forget a payment. So talk to your loan servicer about interest rate discounts they offer which you can benefit from.
5. Get A Side Job
One way to pay off your student loans faster is to make more money. Maybe you can’t get a raise in your current job or have not found a better job yet. If so, you can start a side hustle to increase your income.
A side gig doesn’t have to be driving Lyft or Uber, even though you can. Sometimes, it can mean selling unwanted stuff online, starting a side business, delivering with Grubhub or Postmates, etc.
If paying your student loans is a top priority, you can indeed find a side gig to increase your income.
It’s pretty easy to talk about the ways to pay off your loans faster. But the hard part comes when it’s time to do it. When you decide which payoff strategies work well for your situation, develop a plan that includes constant check-ins to help you stay on track.
You’ll have to make some short-term sacrifices to help you pay off your debts faster. But the benefits you get when you finally pay off your debts are worth the sacrifices you make now. So push through, pay off your debt, and get your financial freedom. It’s worth it.