Many students in the USA benefit from student loans, which come in handy to pay college fees. However, the loans tend to become a significant burden on their paychecks after graduation — putting a lot of pressure on them to find faster ways of repaying the loan.
While it’s not easy to accelerate your loan payments, you must find proven ways to help you repay your student loans faster and focus on your long-term financial goals. That said, this article will walk you through 5 strategies to help repay your loan faster.
1. Be Careful With Extra Payments
As you begin to pay your student loans, consider paying more than the recommended amount to shorten your loan repayment period. However, you must ensure that the student loan providers take into account the extra payments made and update accordingly.
In a nutshell, let your service provider know that the overpayment only applies to your current balance, leaving the next installments the same.
To save money, you can pay the total amount of your student loan on the deadline or make additional payments within the month. Assuming your loan totals $10,000 at an interest rate of 4.5% for ten years, topping up by $100 monthly would leave you debt free about five years in advance.
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2. Get a Job With Student Loan Help
When seeking employment, consider applying to companies that offer student loan assistance benefits to their employees, especially if you are an American citizen.
Most companies do not provide these benefits to non-citizens, so you should apply to refinance your student loan with a US-based lender.
Some companies offering student loan assistance include Google (paying about $2500 annually) and a technology company, Nvidia ( spending about $6000 annually), in student loans.
3. Put Any Bonuses Towards Student Loans
When you receive any extra money, such as from work bonuses, extra funds from the Payday Loan Affiliate Program, or inheritance, the best thing to do is to put that extra money into your loan repayment because that windfall will benefit you in the long run.
While making that sacrifice is complicated, commitment to finishing your student loans will help you stay motivated and plan better for your future. Always track down your payments and celebrate each milestone in paying off your student debt.
4. Refinance If You’ve Got a Good Credit Score
Refinancing will ensure you pay your student loan faster without adding any amount — whether or not you are an American.
Refinancing replaces all your student loans with one private loan and allows you to choose a reasonable payment plan at a lower interest — choose a loan less than the total of your student loan to speed up the process.
Choosing a short period to pay off your debt will help clear your debt much faster, thus saving your paychecks from interest and monthly deductions.
Refinancing $50,000 at 4.5% from 8.5% will push you to pay your student loan debt about two years earlier and save you nearly $13000 — even if monthly payments remain constant.
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5. Enroll in Autopay
Aside from refinancing, you could also speed up your student loan repayment by signing up for autopay.
The federal student services and private loan lenders offer loans discounting 0.25% of the interest rates when you sign up for an autopay service.
Although the savings may be minimal compared to refinancing— about $144 on a $10,000 loan with a ten-year plan saves you a few years of paying loans.
6. Get a Part-Time Job While in College
If you’re in college, you could opt for a part-time job to help reduce the loan amount you’d have borrowed to finance your college education. You can take numerous part-time jobs while in college — writing for blogs and vlogging are some of the most common ones.
You could also check if your college is hiring and applying for those jobs. You can find most of these jobs on your college’s careers page on their website. Getting any of these jobs means earning some income, which significantly reduces the amount of money you’d have borrowed.
Bottom Line
Student loans are only a burden if you’re disciplined and strategic with them. However, you can apply the tips discussed in this post, and you should be on your way out of student debt.
Check with an online calculator how much you save from interest by paying your student debt at once, and the years they shave off your debt.