Student loans have been of tremendous help to lots of students throughout their academic journey. However, the idea of paying up such a loan could become a nightmare and worst scenario become a huge financial burden after graduation. So we’ve come up with easy ways to pay off student loans faster.
Thankfully, with proper strategizing and application of some few steps, like paying more than the minimum monthly payment, downsizing your expenses, getting a side job, and more substantial modifications like loan refinancing, etc, it makes it easier to accelerate your loan repayment thereby wiping away those nightmares.
7 Ways To Pay Off Student Loans Faster
1. Refinance Your Student Loan
Refinancing your student loan is one quick approach to implore in paying off your student loan although you may have to do so with a private lender. One benefit of refinancing student loans is that it lowers your interest rate and gives you more opportunity to afford extra payments on your refinanced loan.
An icing to this is you don’t have to worry about saving up any repayment fee as refinancing lenders don’t charge prepayment penalties. In addition, some refinancing lenders offer discounts based on specific criteria. For example, MPOWER offers a 0.25% cut to students who have refinanced their student loan with them on the condition that it is on autopay
Although taking this step to pay off student loans comes with its risks, it also goes a long way in reducing your interest rate which makes it faster and easier to pay up your student loan.
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2. Pay More Than the Minimum Payment
Paying a little extra, no matter how little, can make a huge difference in the overall repayment term. This is because, paying those additional little amounts, reduces the amount of interest you would need to pay off.
Here is how it works. So after you’ve borrowed a student loan, you are expected to make a fixed minimum payment of an agreed amount on monthly bases which runs for some number of years. Now, by paying more than the minimum amount for each month, you would have successfully shaved off months or even years from your payment timeline.
So if you’re looking to pay off your student loan faster, you should consider this approach. Not only will it speed up your payment timeline, but it also reduces the amount of interest that accrues.
3. Pay Your Loan Biweekly
Paying your loan bi-weekly is another option to consider if you want to pay off your student loan faster. You can do this by splitting your monthly minimum payment in half and paying that amount biweekly.
For example, instead of paying $300 every month, you split it into two and pay $150 every two weeks. And yes, you still get to pay the same amount per month but eventually, end up paying a full extra annual payment because of how the calendar works. The American Institute of CPAs has a biweekly payment calculator that estimates how making biweekly payments affect your loan payment.
So, Without much extra effort on your side, making biweekly payments helps you pay up student loans easier and faster.
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4. Cut on Your Spending
Do you know that as little as cutting off that extra $50 or $80 in a month helps you pay off your student loan faster?
The first step you would need to take is to reconsider your budget and then prioritize your spending. Focus on the essentials and cut back on the inessentials. Take a look at your expenses to consider areas where you would need to downsize. For example, you could move to a cheaper apartment, cut down on the amount spent on shopping, if you eat out at restaurants, have homemade meals, can also consider selling your car or trading it for a less expensive one.
Cutting down on your living expenses goes a long way not just in helping you pay off your student loan faster, it also helps you afford extra payments on your student loan.
5. Get a High-paying Job
Another way to pay your student loan faster is to get a decent job. Most students can pay off their student loans faster than others due to their job choice after graduating.
Getting a high-paying job is one effective way of paying off the loan and still having extra cash for investments. Plus, the fantastic thing about securing a high-paying job is, it gives you that leverage to save up money in the long run which helps you pay up your student loan as quickly as possible.
However, finding high-paying jobs after graduation isn’t always easy but that does make it impossible. To smother your ride, we came up with a list of some high-paying jobs you can try out after graduation:
- Air traffic controllers: $124,540
- Funeral service managers: $78,040
- Radiation therapists: $80,570
- Nuclear medicine technologists: $75,660
- Nuclear technicians: $80,370
- Dental hygienists: $74,070
- Diagnostic medical sonographers: $71,410
- Pharmacist
- Software architect.
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6. Get a Side Job
Getting a side hustle has become the real deal for students who are eager to pay up their loans and even students who just want to make extra cash for themselves. Plus, It has a way of giving you enough room to make extra payments on your student loan which leads to a decrease in the accrued interest rate.
This goes to show that if you can increase your earnings, you can channel the extra cash to paying off your student loan as quickly as possible.
So we have successfully listed out some side jobs you can effortlessly engage in to quickly pay off your student loan.
- Freelance writing
- Make and sell cakes
- Digital marketing/affiliate marketing.
- Engage in an online survey
- Become a research assistant
- Bar attendance/ waiter
- Babysitting/ pet sitting.
- Paid internship
- Online teaching/tutoring.
7. Apply for a Loan Forgiveness
Applying for Student loan forgiveness erases fractions or all of your student loan debt. However, those who qualified for this application are students who took federal loans. In other words, private loans are out of the picture.
You can apply for a student loan if you are faced with an unavoidable circumstance that hinders the payment. Also, student forgiveness can be earned by working in public service. And if you feel you have been extorted by your University or educational institution, you’re entitled to earn student forgiveness under the category of borrower’s defense.
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Conclusion
Learning the ways to pay off student loans faster is worth the effort. For one, getting out of debt earlier reduces your overall interest charges. This will save you money and help you pursue other financial goals, like buying a house or a new car.
So if you’re looking for tips on the best way to pay off student loans quickly, this article has got you covered.