The Best Ways to Manage Your Student Loans So You Can Quickly Pay Them Off
Student loans are great because they help students pay for college, but paying them off can be a long and grueling process. If you have student loans, here are several tips to help you manage them and pay them off quickly.
Decide to Make Student Loan Payments Your Top Priority
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Before you can pay off your student loans, you have to make a conscious decision to make them your top priority. The best way to do that is by creating a budget and sticking to it. It’s not easy at first, but it will become second nature if you stick with it long enough.
Work With Your Lender to Consolidate Your Loans
Consolidation allows you to combine multiple student loans into one, giving you a single monthly payment and usually decreasing your interest rate. But it’s still important to make payments on time because any missed payments will harm your credit score. When you consolidate a student loan, you pay off your debt faster and save money on interest.
Take Advantage of Income-Driven Repayment Plans
Income-driven repayment plans cap monthly payments at a percentage of your income. That means you’ll pay less each month, but it also means that it will take longer to pay off your loans. But if you’re having trouble keeping up with student loan payments, an income-driven plan can help.
Accelerate Your Payments with a Tax Refund
When handling student loans and a full-time job, it can be tough to make ends meet. But if you get a tax refund, consider paying off your student loans with it. For example, a $3,000 refund could cover six months of loan payments. Even if you don’t get a large refund, every little bit helps.
Consider Deferment and Forbearance Options
If you are in school or enrolled in an approved training program, your loans may be eligible for deferment and forbearance options. Forbearance means you don’t have to make payments while your loans are deferred. This can help if you can’t afford to pay back your student loans right away.
Use an Automatic Payment Plan
One of the best ways to quickly pay off your student loans is to enroll in an automatic payment plan. Each month, you’ll have a set amount taken out of your bank account and sent directly to your loan provider.
Refinance Your Loans
One way to start paying off your loans is to refinance them. Refinancing refers to taking out a new loan and using it to pay off one or more of your existing loans. This can be useful if you’re looking for a lower interest rate, want to consolidate several smaller loans into one larger loan, or change repayment terms (like extending your repayment period). As per the experts at Sofi, “Understanding the nuances of consolidation vs. refinancing can help empower you to make financial decisions that work for you.”
With a lot of hard work and dedication, you’ll be able to pay off your student loans in no time. If you have any questions, feel free to leave them in the comments below.
Last Updated on July 11, 2022