There are 44.5 million student loan borrowers in the U.S., and they owe a collective $1.5 trillion as of March 2018.
After graduating, many people make paying off their loans one of their top priorities.
Unfortunately, what people discover is that life will throw them curveballs which will force them to change their priorities. In such cases, paying off college debt can often end up at the bottom of people’s to-do lists. However, when people do this, what they often find out is that ignoring these debts is one of the worst things you can do. Their loan’s interest rate was once a seemingly affordable expense and has developed into an unaffordable debt. So how do you make paying back your student loans more manageable?
Here are 5 easy tips for paying back your student loans as fast as possible.
1. Pay More Than The Monthly Minimum
One of the smartest things you can do when faced with a large debt to pay off is to pay more than the monthly minimum. This is the simplest way to decrease the amount of time you will be paying the loan back and in turn, you will accrue less interest. The more you can put towards your loan each month, the quicker you will be done paying it back, meaning fewer payments and less time for interest to pile up. If possible, this is tip is a MUST DO.
2. Never Skip Payments
If for any reason you cannot afford your payments, because let’s face it, life happens - do not just skip them. You should get in touch with your lender and speak with them immediately about your options. Normally a lender will be willing to work with you and may allow you to lower your monthly payment for a period of time.
Under certain circumstances, with federal student loans you can receive a deferment or forbearance. This allows you to temporarily stop making your payments or reduce your loan payments. This will help you avoid defaulting on the loan.
3. Tighten Your Budget
It’s time you scrutinize your spending habits and cut down where possible. Take a look at your statements to determine where you are spending the most and what changes you can make to reduce those costs. For example, if you’re buying breakfast every morning before work, consider waking up earlier to make your own. These things add up and with just a few adjustments you will really start to see a difference in how far you can stretch your paycheck. You may even consider earning some extra income on the side. Check out these work from home jobs that can help increase your monthly income.
To help see the impact of the sacrifices your making take the money you are saving every day, week, or month and use it to make an extra payment on your loans.
4. Have an Emergency Fund
Nothing can throw off all of your careful planning and budgeting like unexpected car trouble or an accident. Emergency funds create a buffer between you and the unpredicted events life hold. Having these funds built into your budget will make it possible to stay on track with your payments no matter what comes up. This is why it’s essential to start an emergency fund as soon as you can.
5. Explore Student Loan Forgiveness Programs
Did you know, there are federal student loan forgiveness programs as well as some state options? To obtain this type of assistance, you must meet very specific criteria. There are Public Service Loan Forgiveness and Teacher Loan Forgiveness programs. Eligibility is based on your types of employment. Although private student loans cannot be forgiven, federal student loans can be. If you do not meet the requirements for student loan forgiveness, you may want to consider your options to consolidate or refinance your student loan at a lower rate or longer term.