The stats about student debt in the US is dangerous: As of 2018, outstanding student loan debt in America is $1.5 Trillion! If you also contribute to this statistic (just like 44 million other Americans), here’s a list of 5 top-notch tips to free yourself from the excruciating pain on your debt-burdened shoulders and start paying off your student debt.
1. Pay a little extra every month
One of the best ways to pay off your student loans early is to pay more than the minimum amount due each month. Of course, it is not going to be easy to figure out the extra amount but it will benefit you in the long run. You don’t need to pay too much over the minimum amount, any small amount, say about ten bucks that you saved from your daily activities will have a significant impact on your loan balance.
If you don’t have enough savings, you can invest a few dollars from your work bonus. You can also try to reduce your spending for a few months, avoid any unnecessary costs and invest the saved amount into repayment. This will take a certain amount of sacrifice but ultimately, you will be rewarded by dodging interests of the last few months.
2. Divide your payments into two
Splitting your payment into two parts is a clever trick that if used wisely will reduce the burden of loans from your shoulder majorly. For example, if you need to pay at least 500 each month. You can divide this payment into two parts of 250 each, every month. Say, one on the 15th and one on the 30th. This will prevent you from paying a bomb at once and will also help you better manage your finances.Â
Following this technique will make it easier for you to manage your payments. Plus, without you knowing, you will be paying one extra month’s due each year. That’s because, on a schedule, you will make only 12 payments a year. However, paying twice a month, each after two weeks will ultimately result in 26 payments in a year (52 divided by 2, duh!). Thus, you will be paying an entire month’s worth of extra amount. On a typical 10-year repayment term, this technique could reduce an entire year from the cycle! You can even get in touch with a debt collector since they have a great knowledge about the field and no one else can better assist you in this. Cedars business services is the known name in the field of debt collection.
3. Volunteer
Repaying student loans can be a tiring task. But did you ever think that you can help out the society while you repay your own student debts? It is a great idea, isn’t it? There are many organizations that offer student loan forgiveness or repayment in exchange for you spending a certain number of hours volunteering non-profit projects. Thus, you help not only yourself but also others in need.
It is not necessarily important that you strictly adhere to the organization’s guidelines and successfully complete the program to be eligible for student loan repayment but it is a great opportunity to help society while also helping yourself.
4. Look for jobs that offer student loan forgiveness
The whole point of taking your student loans in the first place was to get a degree in order to secure your dream job, right? So make sure that the same job helps you in repaying the student loans you gauged in order to get there. Many companies are now offering to help employees with their student loans, on top of the salary, as a standard workplace benefit.
Often, loan forgiveness is offered to individuals when a particular area, such as a low-income or rural community, does not have a specific profession. Generally, these professions are that of a teacher, law enforcement, doctors, lawyers, etc. Keep in mind many of these opportunities of loan forgiveness come with many requirements and conditions. And be sure about the type of student loan you have taken and whether the contract states that it assists in repaying that form of the student loan. Only then should you agree, else keep looking for other opportunities.
5. Sign up for auto-pay
Though it won’t have much impact on your student loan debt, signing up for automatic payments can help you in reducing some interest and help you put more cash toward the amount you had borrowed from the bank.
Signing up for autopay will also ensure that you never miss your payment as the permitted amount will be deducted from your account automatically, on the scheduled date every month. This reduces the burden of making the payments personally. On top of that, there are many banks that offer you a discount if you sign up for the scheme.
Bottom Line
Keep in mind, no debt is bigger than your commitment. It’s going to be difficult, but the struggle is going to be worth it. Prioritize your spending and you will be free as a bird before you had even imagined.
