It’s back-to-school month for college students all over the country. Whether you’re a student just starting out or whether you’re finally graduating this year, it’s never too early or too late to plan for paying back your student loans. With the cost of higher education, accruing student debt is usually unavoidable and many carry that burden for 10 years or more after graduation. Rather than tolerating that burden and letting your debt drag you down, choose to be proactive.
Here’s how to pay off student loans faster:
Start saving before you graduate.
Be smart and cut costs where you can. It may be hard to give up those pricey pumpkin-spice lattes or avoid the latest, trendy shoes or skip a concert or movie, but you’ll be glad of your savings once you graduate.
Use the 6-month grace period to save money for your student loans.
Most student loan lenders provide a six-month grace period after graduation so that people can find and start a job. This is a great time to save up extra money that you can apply to your payments once they begin. Remember that you are still accruing interest during this time, so it’s wise to start saving and tackling your student loan debt as fast as possible.
Pay more than the minimum payment.
This tip holds true for any loan or debt you take on throughout your lifetime. Paying more than the minimum every month will reduce the time you must make payments and save some money on interest as well.
Make biweekly payments
Plan your budget and schedule making two payments a month or payments every other week. This will put a good-size dent in your student loans and help you become debt free much faster.
Change your payment plan to a shorter one.
Many student loan programs offer different repayment options. If your budget allows, opt for one that’s a shorter term and gets you out of debt faster. You should be able to log into your account, research your repayment choices, and select the one that works best for you.
See if you’re eligible for student loan forgiveness.
There are a few student loan forgiveness programs available. If you qualify, you may make payments for a short period of time and then see the rest of your debt canceled. It is definitely worth checking out and seeing if you’re eligible for any of these programs. Examples include Income-Driven Repayment Forgiveness, Public Service Loan Forgiveness, and Teacher Loan Forgiveness.
Apply windfalls to student loans
Do you earn bonuses or commissions? Did you inherit money, receive a monetary gift, or a tax refund? Rather than spending it on wants, use these windfalls to take a chunk out of your student loan. Relieving some of that debt stress is better than the short-term perks of whatever you might’ve had your heart set on buying.
Refinance to a lower interest rate
Refinancing options are always worth a look – this applies to home loans and auto loans as well. If you can refinance your student loans to a lower interest rate, you’ll immediately start saving money, and it may be that you can pay extra on your debt every month, shortening your payback time.
Also, credit unions like Members 1st usually offer better interest rates than banks – and better, community-centered service.
Consolidate into a lower interest rate loan
Especially if you have multiple student loans, you should consider consolidating to one, low-interest rate loan. Being in debt is stressful enough. Managing multiple monthly payments with multiple lenders only adds to that stress. By consolidating, you can stay on top of your finances much easier, and you may also save money if you secure a lower interest rate.
We should note: If you have federal student loans and you consolidate or refinance with a private lender, you cannot return to a federal loan program.
Secure a low-interest student loan or refinance with Members 1st of NJ
Federal student loans aren’t always enough to cover the total cost of higher education. In this case, a private student loan with Members 1st is a great option. Here are some features of our student loan program:
- Borrow as little as $2,000 or up to the cost of attendance per year (maximum of $120,000 in undergraduate loans or $160,000 in graduate loans)
- Choose to either make interest payments or make a nominal $25 Proactive Payment towards the loan balance while in school.
- Use the funds for any qualified educational expense, including past due tuition bills.
- Quick approval once your completed application is received
- Competitive interest rates (with good grades, even lower rates)
- 30-day no-fee return policy (This allows you to cancel the loan within 30 days of disbursement without fees or interest.)
- Cosigner release is available for creditworthy borrowers after 24 consecutive, on-time, principal-plus-interest payments.
Find out more or contact a Members 1st representative today.