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So many people leave college with a mountain of debt and sometimes, it doesn’t seem like it was all worth it. Even though you have increased earning potential, it is balanced with this massive debt that you are carrying and it feels like you’re never going to pay it back. It’s not a great way to start your working life and you will probably be paying that debt off for a long time to come. That makes it a lot harder to reach a lot of your other financial goals and if you are still working on your student debt when you are a lot older, it can interfere with your retirement saving plans.
So, if you want to achieve financial freedom, it’s important that you deal with your student loan as quickly as possible so you can start putting your money into more important things. A lot of people already assume that they can’t pay it off, but that’s not the attitude to have. If you follow these simple tips, you can pay off your student loan quickly and get back to your long term financial goals.
Clear Other Debts First
Before you start thinking about your student loan, you should look at your other debts. In most cases, they are more urgent and the consequences for missing payments on something like a credit card can be serious, so you should worry about those before you start trying to clear your student loan debt. The other thing to remember is that once you clear all of your other debts, you will have a lot more spare income to put towards paying down your student loans. If you write a strict budget and get rid of your other debts quickly, and then maintain good spending habits so you don’t build up anymore, you will find it so much easier to deal with your student loans.
Refinance The Loans
Now that you have cleared all of your other debts, you can start making a dent in your student loans. But before you pay anything back, you should think about the amount that you owe and if there is any way that you can reduce it. Most of the time, there is, if you refinance the loans. If you have a good credit score (which is another reason why it’s important to pay off other debts) you should be able to get a better interest rate on the loan so you don’t have as much to pay back. However, you do need to be thorough when you are searching for refinancing loans because there are a lot of companies out there and some will offer much better deals than others. The best thing to do is go to a refinance aggregator that has access to a marketplace of lenders and let them do some comparisons for you. They will check your credit score and loan amount, and then look through all of the available lenders so they can find you the best possible deal. By refinancing the loan and reducing the amount that you owe, you make it so much easier to pay back your student loans quickly.
Use Windfalls Wisely
The best way to pay your loan off faster is to pay more than the minimum payments, but you already know that. The problem is, most people can’t afford to do that every month. But you don’t have to do it every month to make a difference, even a few big overpayments can seriously knock the balance down and help you clear the debt quickly, which is why you have to use your windfalls wisely. Whenever you come into a big chunk of money, consider using some or all of it on your student loan. For example, if you get a bonus at work, put it into loan payments. If you inherit some money or you have some spare money from selling a house or a car, use it to pay down the loan. It’s not the most exciting way to use these windfalls and you probably have better plans, but if you are serious about clearing your student loan debts quickly, you have to take the sensible option sometimes.
Sign Up For Auto-pay
If you haven’t already signed up for it, you should look into automatic payments. A lot of people don’t like doing this because they don’t want the money to be taken if they can’t really afford it. That is an issue if you are not very financially stable and you can’t always be sure that the money will be there. But once you are in a good financial position, you should set up auto-pay. You will get some of the interest knocked off if you make automatic payments and even though it isn’t that much (usually about 0.25 percent) it still adds up over time and every small reduction makes a difference. Having automatic payments also means that you can’t forget about it, so it’s easier to stick to your plan and pay off the loan quickly.
Find A Company That Offers Repayment Assistance
If you are looking for work, you should always consider the benefits that the company offers. But one benefit that often gets overlooked is student loan repayment assistance. More and more companies are starting to offer this benefit and if you are serious about paying off your loans, you should definitely consider it in your job search. Depending on the company, you could get anywhere between $500 and $10,000 a year towards your student loans, just for working at the company. It’s a great way to boost your payments and clear the debt in no time at all.
As well as companies that offer student loan assistance, there are organizations that will help you pay back the money if you volunteer with them. If you are already considering volunteering, try to look for organizations that will help with your student loans.
When you first graduate college, paying off your loan debt seems impossible. But you can do it if you use these simple tips.