Having student debt is one of the worst scenarios ever because you know a large part of your pay check will go towards paying the loan. You might feel that your student debt will last forever, but it doesn’t have to be that way. Here are a few tips that will help you out:
Pay More than the Minimum Amount
This is a very effective way of reducing your debt. Make the payments hat you have to pay and add an additional amount. Since your payments will be set up, each amount will go towards your principal.
Find the Payoff Date
Find out the payoff date and see when you will eventually pay the loan off. One easy to keep track of things is to check out the Student loan Hero dashboard as it lets you adjust the payments and see the new due dates. This is a great way to stay motivated.
Refinancing the Loan
Refinancing is one of the best ways to get rid of the loan. It basically decreases the interest rate, which means that more amount will go towards paying off the loan. In addition to this, you can consolidate your loan as well.
Use a Cash Windfall
A cash windfall comes in the form of inheritance, settlement from lawsuit, and lottery winnings. If you have a cash windfall, don’t be tempted to spend it, instead use it to pay off the loan. Remember that even if you don’t have an inheritance, tax payers get a cash windfall in the form of a tax refund.
Work in the Public Sector
There are a certain jobs that can offer forgiveness for part or all of the student loans. Make sure that you meet the requirements and know all the details about such jobs.
Use Your Raises
Do you get annual appraisals? If yes, you should use at least 50% of it for paying your student loan.
Don’t Use Repayment Programs
If you want to pay your student loan at a faster rate, you should avoid repayment plans. These plans basically reduce the payment by lengthening the term of the loan.
Cut the Budget
Okay, at least trim it. There are so many things that you pay for that isn’t really needed. Some of the things that you can do to save money includes:
- Stop paying for the gym membership if you don’t use it
- Cancel the cable subscription
- Don’t eat out
- Give up alcohol
- Get a part time job
Have a Strategy about the Debt
Make sure that you pay off the high interest loans first. This is known as debt avalanche and helps you out in the long run.
Pay Every Two Weeks
One great strategy is to pay the loans every two weeks. You can split the monthly payment into half and pay it every two weeks. This way you will make a full extra payment over the year.