Are you struggling to pay off your student loans?
With the average student loan debt hovering over $30,000, there’s no doubt millions of graduates across the country are struggling to settle their debts. Your situation can get worse if you don’t find a job soon after graduating or if the job you have doesn’t provide a big enough paycheck.
So, what should you do? Give up and let your lenders do what they wish?
Student debt isn’t a life sentence. You can pay it off.
Here’s is the best way to pay off student loans and move closer toward achieving financial freedom.
Increase Your Monthly Repayment Amount
You have an obligation to make a pre-determined minimum payment on your student loans every month. If your loan is on a 10-year plan, for instance, and you’re required to pay $500 every month, you have to pay at least this amount for a decade.
But what if you voluntarily decided to pay $600 every month? You’ll clear off the loan a couple of years ahead of schedule, right?
As such, one ideal way to pay off your student debt is to increase your monthly repayment, as long as your income allows. Prior to doing this, be sure to instruct your lender that you’ll be making higher monthly payments. This way, they will be able to apply the overpayments to your loan balance instead of rolling them over to the next month.
If your current income doesn’t allow you to increase your monthly repayment amount, consider taking up a second or part-time job.
Refinance Your Loan
When you took out your student loan, you probably didn’t give much thought to the terms of the loan. Nothing wrong with this. It’s understandable that the excitement of going to college can cloud your judgment as regards the interest charged on your student loan.
Now that you’ve graduated college and have a better understanding of how loans and interest rates work, you’re in a better position to determine whether your loan is overpriced (charging a high interest rate).
If it is, it’s not too late to do something. You can refinance the loan.
Refinancing enables you to get better terms on an existing loan. If you can score a lower interest rate on your student loan, it’ll be easier to pay it off quickly. A lower interest rate means a lower monthly repayment, so you can increase your repayments with your current income.
Consolidate Your Student Loans
Do you have more than one student loan?
If yes, you know how difficult it can be to keep tabs on multiple repayments every month.
There’s good news. You can consolidate the loans into a single loan.
There’s even better news. Consolidated loans typically carry a lower interest rate than the weighted interest rate of those loans combined. You can use a consolidation loan company like Debthunch to find the best deals on student consolidation loans.
Choose the Best Way to Pay off Student Loans
Student loans helped fund your college education. And just like any other loan, they have to be repaid. Unfortunately, repaying them is easier said than done.
With this guide, though, you now know the various options you have. Your task is to choose the best way to pay off student loans, considering the state of your finances.
All the best and keep tabs on our site for more money tips and insights.