It’s almost necessary to go into a little bit of debt to get a college or university degree in today’s age. Tuition and book costs are astronomical compared to what they used to be.
This means that after all of the stress of having to go to school and achieve the grades you want, now, you have to worry about paying off the loan that allowed you to get there in the first place. Most loans will give you a long enough grace period to find a job and actually start making money, but the loan itself isn’t going anywhere. Education loan finance is a billion-dollar business – one that not many people are that enthused to be a part of.
If you want to free yourself from the chains of student debt, try out these tips:
Don’t just make the minimum monthly payments.
Making just the minimum payments might seem appealing since you’ll have more money on a month-to-month basis. However, depending on your interest rate, you might end up paying much more by the time you’ve finally paid off the loan in its entirety. Each month that passes adds extra money you’ll have to pay back. When you pay more than the minimum, you reduce the total amount of months you’ll have to pay.
Make bi-weekly payments.
If you cut your payments in half and pay them twice a month, your bill will seem smaller than it really is, but most importantly, you’ll get one extra payment per year. When you pay monthly, that will be 12 payments. But then, if you pay every two weeks, that will be thirteen payments per year since there are 52 weeks in a year that if divided by 4 (weeks in a month), will end up being 13. This can shave a lot of time off of your overall loan repayment schedule.
Find companies that will help repay your loan.
To be more competitive in today’s market, many businesses are choosing to invest in their employees to make them more likely to come to their company and stick around. Since your student loan enabled you to get a job at that business in the first place, many offer programs where they assist you in paying off your student loans. Often, these come with contracts stipulating you’ll be at the company for X amount of time, but it’s often worth it in the long run.
Sign up for autopay.
You’ll have to pay back your loan anyway, so signing up for automatic payments is hardly inconvenient. Many lenders will knock some money off of your overall interest rate once you’ve signed up for automatic payment, since they enjoy the security of automated payments each billing period.
There are many more shrewd and inventive ways to knock months to years off of your student loan payment plan, but these are just some of the most commonly used ones. Whatever payment plan you choose should be tailored to your earning schedule, as well as your personality. The penalties from missing a single payment can set you back just as much time as you saved, so don’t choose any plan you don’t think you’ll be able to stick with.