For many, student loans are a necessary debt—a means of paying for college and earning a degree that could potentially put life-changing career aspirations within reach. Your student debt doesn’t have to be financially crippling though.
Start on your way to building a financially stable future with these six tips for paying off your college debt.
- Pay up each month. Making payments for more than your monthly minimum is one of the easiest ways to slash your student loans. Make sure these payments are earmarked for the loan balance. Otherwise, the additional funds could be applied to the following payment.
- Refinance. If you have good credit and stable income, you could be eligible for refinancing, with a lower interest rate and shorter terms. You’ll likely have a larger payment, but reducing the total number of pay periods also reduces the interest owed.
- Set up autopay. Autopay not only eliminates the potential for missed or forgotten payments, but it can also help you save money. Federal loan servicers offer up to a .25% interest rate deduction if you set up automatic payments. .25% may not seem like much, but over time, can be a significant amount.
- Make extra payments. Did you receive a healthy tax return or a holiday bonus from work? Making additional payments (even small ones) on your loans is a great way to carve chunks from the total balance.
- Pick up a side hustle. Countless Americans bolster their income by driving for car services, delivery driving in the evenings or dog sitting on the weekends. Extra income allows you to put a greater percentage of your income toward your college debt.
- Watch your spending. Paying down debt requires vigilant saving and a conscious reduction in spending. Creating a budget and controlling your spending is an easy way to make sure you spend your income responsibly.
Using these strategies, you’ll be on your way to a more financially free future without your student loans hanging over your head.
If you’d like to further discuss other debt payment strategies, please contact the office.
This communication is designed to provide accurate and authoritative information on the subjects covered. It is not however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.