The average student borrower has nearly $40,000 in debt. This can be a substantial burden to those who are working to pay down their student loans. There are, however, some things that can help with this. Here are some tips for paying off student loans fast.
Autopay is a function you can set up with your loan servicer to have your payments automatically deducted each time you pay your bill. There are a few reasons why utilizing autopay can help you pay off student loans fast.
First, you don’t want to miss debt payments. Doing this can lead to issues with your lender, affect your credit score, and, overall, isn’t going to help you pay off your debt in any way. Furthermore, many student loan lenders will actually give you an interest rate discount for using autopay. Depending on the organization, it’s not uncommon to get a quarter percent discounted from your interest rate for doing this.
Change Your Payment Schedule and Amount
Whether you’re using autopay or just paying your student loans the old fashioned way, changing your payment schedule or the amount you’re paying can expedite your debt repayment.
You’ll want to first make sure this is okay with your lender, as some might have rules against paying more than the set amount, or have a penalty for paying off the loan early. If there’s no issue, you can just pay more than you have to each month to eliminate some of your principal balance.
It’s also possible to just make biweekly instead of monthly payments. Since there are 52 weeks in the year, that makes 26 payments. If you simply split your monthly bill in half, and pay every two weeks, this will lead to you paying a thirteenth month each year. This will help you painlessly pay off your loans faster.
Refinance Your Student Loans
Student loan refinancing is another route to potentially paying down your debt faster. A student loan refinance is simple process that can get you a lower interest rate, or allow you to change the repayment term on your loan.
So, what is refinancing? It’s basically a process of taking out a new loan to replace your current one. When you do this, your old debt is paid off and you then proceed to service the new loan. If you can get a loan that works better for your situation, it can allow you to get out of debt sooner.
Furthermore, it’s easy to find the best student loan refinance when you utilize a service like Juno. They partner with only a few select lenders that offer the absolute best deals to student loan borrowers. It’s easy to apply. As long as you meet credit and income requirements, you should have no problem with approval. If you need help qualifying, it’s still possible if you have a co-signer.
Pay During Deferment or Forbearance Periods
When you have federal loans, there are certain periods of time where you might not accumulate interest or even have to pay on your loans at all. These deferment and forbearance periods are a perfect opportunity to set yourself up to pay off your loans faster. By continuing to make payments during these times, you can reduce the amount you owe by a substantial amount.
Additionally, sometimes you’ll still be accumulating interest on loans even if you don’t have to pay on them—such as when you’re still in school for certain federal and private loans. Paying during this time can give you a leg up once you’re out of school and have to officially start repaying the loan.
Put Extra Funds Toward Paying Down Debt
Many will understand the feeling of being tight on funds. But there are times when you might get an unexpected sum of money—possibly from a tax return, a relative, or anything. Using these funds to pay down your debt, instead of using them to splurge, is typically a wise choice. It will allow you to get out of debt faster, which is ultimately more beneficial to you.
Being in debt is no fun. Fortunately, there are some things borrowers can do in order to pay of their student loans faster.