Student loan debt is a reality for college students all over the country, and getting that debt paid off as fast as possible is the goal after graduation. In order to pay off this debt sooner rather than later, you may need to adjust the amount of money you put toward your student loans each month.
Luckily, there are a few steps you can take to shorten the amount of time it takes to pay back your student loans and save big on interest.
1. Make Larger Payments
This one may be obvious, but putting more money away each month toward your student loan debt is the fastest way to make that balance owed shrink. Even if you can only afford $10 extra per month, it’s a great place to start until you are in a position to increase those payments more. Making a detailed budget and finding extra money that way is also a plus.
Another way to add extra money is to set up automatic payments for the increased amount. This keeps you from having to remember your payment amount each month and makes saving extra even easier.
Refinancing your student loans is a way that you can lower your interest rate and save money in the long run. Whether or not your interest rates will actually be decreased with a refinance will depend on several factors, including your credit score, so it’s best to do your research to make sure that refinancing will benefit you.
3. Work in Public Service
Many student loans can be reduced or forgiven entirely if you decide to take a job in public service areas. There are certain criteria to meet in order to apply, but these programs can be great ways to reduce your debt.
4. Make Your Extra Money Count
If you receive unexpected money like a raise or your yearly tax return, consider putting it toward repaying your student loans. An extra few thousand dollars could shave years off of your payment plan, and that can help you save quite a bit.
5. Adjust Your Focus
If you have multiple student loans with varying payment plans and interest rates, it is best to focus on paying off the loan with the highest interest rate first. While paying on any loan is great progress, paying off high-interest loans first will prevent you from paying that high interest rate for longer periods, saving you money over the long-term.
If you would like to learn more about paying off student loans, CNE’s Money School will feature a free class where you can learn strategies to apply to your own debt repayment. Check out the full schedule for the day here.