Did you know that about 70% of college graduates leave school with student loan debt? Depending on the type and cost of your school, your loans can range from several thousand dollars to more than $40,000.
You may be thinking: How am I going to pay back this money? Student loans are difficult to avoid these days; fortunately, you have some great resources and tips at your fingertips. Even if the process feels overwhelming, it doesn’t have to be scary! Check out these helpful insider secrets to pay your student loan fast and furious.
1) Know your repayment plan options
When you start repaying your student loans, you may be in for a big surprise: the amount you’ll have to pay each month may be higher than you expect. If you have subsidized loans, you’re lucky, because you’ll likely have lower monthly payments than you would with unsubsidized loans.
Subsidized loans are those for which the federal government pays the interest while you are in school. Unsubsidized loans are those for which you are responsible for the interest payments as they accrue. If you can’t afford your current monthly payment, you should know that some repayment plan options may help you better manage your payments.
2) Apply for an interest-free extension
You may be able to apply for a federal extension on your student loans that would allow you to postpone your payments for a few extra months, depending on your situation. Common reasons for deferring your student loan payments include financial hardship, unemployment, or enrollment in an accredited educational program.
You can apply for a deferment or forbearance online or by calling your loan servicer. Be aware that interest will accrue on subsidized loans during this time, and will be capitalized (added to your principal balance) at the end of the deferment period. For unsubsidized loans, interest accrues and is added to your principal balance immediately.
3) Consolidate and refinance
If you have federal student loans, you may be able to consolidate and lower your interest rate with a federal Direct Consolidation Loan. You may also be able to refinance your student loans with a private lender. This can be a great way to lower your monthly payments, but remember that interest rates are usually higher with private lenders. Be sure to check your credit report and score before you apply for a new loan.
4) Make payments you can afford
Many people get a job or find a second job to pay off their student loans. But this can be a very stressful situation and one that you would like to avoid. Here are a few tips to make your payments more manageable: – Make payments as soon as you get your first payment notice. – Pay as much as you can afford each month. – Get help from a relative, friend, or financial aid office if you are struggling to make payments.
You can also refer to 3 Great Reasons Why You Should Get A Personal Loan
5) Get a job, fast !
If you have federal loans, you can get a partial loan discharge if you work at least 10 hours a week in a qualifying public service job. This includes military service, public health, and other occupations. You can also get a partial loan discharge if you are totally and permanently disabled. You can get more information about these programs and your options by calling your loan servicer or visiting their website.
Student loans are typically a huge burden for most people, but they needn’t be a never-ending source of worry. By following the tips in this article, you can be well on your way to paying them off and moving forward with your life. Remember to keep track of your loans and contact your lender if you have any questions or concerns along the way!