The Ultimate Guide To Paying Off Your Student Loan Faster

Image Source: FreeImages

‍

With student loan debt hitting over $1.5 trillion, it’s now the second-largest source of personal debt for American households. As of June 2018, the average Class of 2018 graduate has amassed $20,990 in student loan debt. That’s a lot of money to pay back quickly — especially if you want to buy a home, start a family, or invest in another degree sooner rather than later. Fortunately, there are ways to pay off your student loans faster. By reading this article and putting its advice into action, you could save tens of thousands of dollars and pay off your loans years sooner than you previously expected.

What is the best way to pay off student loans?

There are several ways to pay off student loans faster. Finding the one that works best for you will depend on your current financial situation and goals. You might find that a combination of strategies works best, too. To fully understand how you can pay off student loans faster, it’s important to first understand the different ways to repay your student loans. There are a few main repayment options: Standard: Standard repayment is the default repayment method. Each month, you’ll repay your loans in full with a fixed amount. Standard repayment has a fixed term of 10 years and does not change based on your income or the amount you owe. Graduated: Graduated repayment starts off with smaller monthly payments that increase every two years as you continue to make new loans. Standard: This repayment method is best for people who have a secure job and a steady income. This is because you’ll be paying less in the long run since there are no higher monthly payments at the beginning of the term.

Consolidate Your Loans

Student loans can be an overwhelming burden, but it’s important to remember that you don’t have to repay your loans all at once. You can break this burden up into smaller payments by refinancing your student loans. You can do this by applying for a new student loan and consolidating your existing loans into one new, single payment. By refinancing your existing loans and taking out a new loan with a lower interest rate, you’ll be able to reduce the amount you repay each month.

When you consolidate your loans, you’ll be making one payment each month instead of multiple payments to multiple lenders. You’ll also be able to take advantage of lower interest rates, which will help you to repay your debt more quickly.

Pay more than the minimum every month

One of the best ways to pay off student loans quickly is to pay more than the minimum monthly payment each month. This may seem counterintuitive — after all, why pay more than you have to? The reasoning behind doing this is simple — you want to reduce the amount you owe as quickly as possible. The sooner you pay off your student loans, the less interest you’ll pay. By paying more than the minimum each month, you’ll reduce the total amount of interest you pay on your loan. Doing this will save you a lot of money in the long run.

By paying 10% of your total student loan amount each month, you’ll shave years off your repayment period. If you’re struggling to figure out how you’re going to pay off your student loans, there are a few different ways to earn extra money. From finding a side gig to refinancing your home, there are various ways to make extra money each month.

Find ways to increase your income

If you’re looking for ways to pay off student loans quickly, you may want to consider finding a side hustle. Working a part-time job or freelance gig can help you to increase your monthly income. The extra money you make can be used to pay off your student loans faster. To earn more money, you can: Take on a part-time job: Working a few hours a week can help you to make $300 to $600 each month. Participate in a cash-for-work program: These are often offered through nonprofits and can provide you with an added income of as much as $25 an hour.

Find other creative ways to make some extra money — like renting your home on Airbnb or selling your old stuff online.

Conclusion

Paying off student loans can be a challenging undertaking, but it’s important to remember that there are ways to make it less of a burden. By consolidating your loans, paying more than the minimum monthly payment, and finding ways to increase your income, you can repay your loans faster and save thousands in interest. By following these tips, you can make a real impact on your student loan debt and accelerate your path to being debt-free.