With so many of us aspiring to get a degree, its no wonder why Americans owe $1.3 trillion in student loans. Although a degree can help you get a higher paying job, you may be burdened by student loan debt for years to come. On average, students owe over $35,000 each for their education. For many of us, it can feel like it will never go away.
If you want to pay off your student loans faster, here are some helpful tips:
Pay While in School
This may sound odd, but by starting to pay off your student debt before graduation, you could be saving thousands of dollars in interest expense in the long run. If you haven’t already, consider getting a part-time job while in college to help pay for your tuition.
Some lenders may penalize you for early payments, so be sure to contact your lender and see if this applies to your loan(s) as well.
Pay Over the Minimum
One of the easiest and most effective ways to make dents in your student loans is to overpay your monthly statement. Any extra payment you make towards your loan will go towards reducing the principal amount of the loan itself. An extra amount of $40 per month can also help you save big in the long run with interest.
If you have already graduated and are working a job, consider reducing your living expenses and allocating the money you save towards repaying your student loans. One of the largest expenses you will face as an adult is rent.
If you want to save big every month, consider moving back home with your parents. You have many more years ahead where you can be an adult and do as you please, but living at home can help you save big.
Refinance Your Loans
If you took out a loan with higher than average interest rates, you can actually refinance your loan to a lower rate. If you have more than 1 college loan, you can try to combine them into a single loan with a reduced interest rate.
By refinancing, you can also reduce your monthly payments as well. Keep in mind that federal student loans can offer some potential benefits over a private loan, so be sure to weigh the pros and cons.
All of us with a degree hoped that attending college will help pave a new road for us. However, due to the large expense of a college education, repaying your student loans can feel like a lifetime expense. By paying off your loans faster, you can begin to enjoy the financial benefits of a college degree much sooner than most.