Student loans are a worry for almost everyone and can cause a lot of stress on young individuals. The payments can seem never-ending, and it’s unsettling to see a large part of your paycheck disappear. However, it’s important not to get too overwhelmed, as there are strategies to help you pay off your loans quickly and easily. In this article, we’ll provide you with some tips and tricks to help you get on top of your debt. Trust us when we say, the quicker you get rid of it, the better.
Take time to choose the right lender
One of the most important things you need to do before you even start paying off your student loan is to choose the right lender to begin with. This is essential because it can ultimately determine how much interest you will be paying over the next few years. Finding a great lender could potentially save you hundreds of dollars.
A certificate of deposit is always a good way to go because you have a lock-in interest rate. A popular choice for many is Sallie Mae, which has many different options. Sallie Mae still has good CD rates and should be considered if you’re not wanting to worry about the hassle of anything changing. Make sure you ask around for advice and opinions before you make your decision, it can make a huge difference.
Get a part-time job while you are still learning
Taking a part-time job is not only a great way to make extra money for luxuries while in college but can also help you pay off your loans as soon as possible. By setting aside a little money each week, you can put a great payment onto your debt initially and take months off of your loan. While it might seem a little annoying, you’ll be grateful for the money you save on interest.
On top of that, if you do happen to be in a bit of dry spell, it’s always good to have savings prepared so that you don’t incur extra fees for missed payments. Say, for example, that you put away $10 a week when you start college. Four years later, that’s $2000 you can put straight onto your loan. $30, and it’s over $6000. It can undoubtedly make a huge difference.
Increase your payments
When you start paying back your loan, it will generally be close to the same amount each month. If you’re looking to pay it off a little quicker, try increasing your payments above the minimum. Even as little as $5 a week can be a huge difference.
If something does happen and you need to put it back down again, it’s always an option. Most lenders are understanding of situations, and as long as you are still paying on time, they won’t be concerned. Just remember, the quicker you pay it off, the faster you no longer have to worry about it.
Add an extra payment here and there
If you don’t want to increase your overall payments for each month, another thing you can do is add on an extra payment here and there. Maybe you’ve done some extra shifts at work, or received your tax back? Put it on your debt, and you can slowly reduce the amount of time it will take to pay it off. It might be hard to see all that money go, but it will definitely be worth it. It would be best if you also aimed to pay off as much as you can while you are still in college. The last thing you want is to put your life on hold because it has accumulated so high.
Set yourself a budget
One of the main reasons why many individuals struggle to pay off their debt is that they don’t budget their finances. This then can lead them to fall short and miss payments as they don’t currently have the funds. By creating yourself a budget with all of your expenses planned out, you’ll know exactly how much you can afford to spend on each area. Everything from your bills, debt, groceries, and luxurious should have their own section. At the end of each month, you can then evaluate your expenses and see where you can be a little more lenient. Check out some budget templates online if you need help getting started.
Combine your debts
For some individuals, over the course of your college years, you may have accumulated more than one type of debt. This can cause great confusion, especially if you’ve used different lenders with different interest rates. To make things easy, you should aim to consolidate all of your various loans into one. This will make your interest rate go down, and you will find it much easier to manage. You will be able to physically see the amount that is left and make payments quickly and easily.
Prioritize everything
Lastly, an important thing that you should remember is that your student loans shouldn’t rule your life. It’s essential to prioritize everything so that you can determine what needs to be sorted out first. For example, you obviously would want to pay your housing payments before your student loan. You also might have a higher interest on your credit card, so it might be worthwhile to pay it off first. By determining the priority of things, you can keep everything sorted and won’t be so stressed about managing your finances. It can certainly make a huge difference.
While it is normal to get overwhelmed when you first see your student loans, it’s important to remember that you can get through this. The more ahead of yourself you are, the easier it will be to make payments and manage any of your accumulated debt. While it might seem easier to leave it all until later on in life, it’s better to pay it off quickly. This way, you can then focus on graduating, getting a fantastic new job, home, and starting a family.
Disclaimer: This content does not necessarily represent the views of IWB.