Student loan debt is at an all-time high and it is something both current and former students continue to struggle with. At times, the situation may seem hopeless. Fortunately, it is not. For those feeling as though student loans are something they are just going to have to live with for the remainder of their lives, there is hope.
Follow the 14 quick tips below and you may just be surprised at how quickly your student loans are paid off in full.
Using autopay is a great way to ensure your student loan payment is paid on time every month. This will not only help ensure that you do not incur additional interest charges, but it will also help if you want government assistance with your loan in the future. There are many state-run programs that help with student loans, but you will only qualify for them if you have not missed a payment.
Avoid Interest at All Costs
Many students are amazed at how quickly a small student loan can balloon into a much larger debt simply due to interest. Paying off your student loans once you are out of school is a great way to avoid interest accumulating on your loans. You can also start paying your loans when you are already in school, and make monthly payments even during the grace period so that it is not added to your overall balance.
Pay More than the Minimum Amount Each Month
Just like credit cards, paying more than the minimum amount due each month is a great way to pay off your student loans fast. Not only will avoid that interest that is the bane of so many students, but you will also slowly chip away at the principal, too.
Use Grace Periods Wisely
It is easy to sit back during the grace period of your loan and just be happy that you do not owe anything yet. However, even if you only pay $30 a month during the grace period, this will add up to huge savings in the end, and help you get a head start on that repayment plan.
Use Your Payday Wisely
Of course, the most obvious way to use your paycheck to pay off your student loan is to simply make a small payment every time you get paid. However, you can take it one step further than that. On the day you get a paycheck, put whatever is left in your bank account (from the previous paycheck) towards your loan. Even if it is a small amount, it will add up in the end.
Use the Snowball Effect for Multiple Loans
Many people have more than one student loan. When this is the case, the snowball method can do a lot for your morale. The snowball method means paying off the loans with the lowest interest rate first, and then focusing on the higher-interest loans. Although you want to ensure you are still making minimum payments on all of your loans, paying off the smaller ones first can be a real boost that makes you want to keep going.
Use 401(k)s Wisely
Your 401(k) may just be the big boost you need to pay off your loan. Many people are hesitant to do this due to penalties for early withdrawals and because they understand a 401(k) is an investment in their future. Still, while you are drowning in debt, they can be a lifesaver. In March of 2020, the Senate approved a package that allows people to take out up to $100,000 from their 401(k) as a hardship withdrawal without any penalties. Just make sure that immediately after withdrawing it, you start making a plan for future investments, as well.
Use Your Tax Refunds
Many people think of their tax refunds as ‘found money.’ While you do not necessarily need to abandon this train of thought, use the money for something that will help you, such as paying back your student loans, rather than for something that will not give you something back in return.
Make a Budget
This one should go without saying, but too many people still do not have a proper budget in place. Create a budget and most importantly, stick to it. Whatever money you have left can go towards your student loans.
Do Not Use a Consolidation Company
Any company that promises to consolidate your loan–and is not part of the federal program that does it for free–is likely a scam that will only cost you money in the end. Do not fall for it and know that any company that charges a fee for their application (usually around $500,) is not legitimate.
Do Not Ignore Your Payments
Even if you cannot make a payment, call your lender or loan servicer. They are much more willing to work with people that are honest about their inability to pay than those that try to run from the problem.
Check with Your Employer
If you work for a non-profit or for the government, you may be eligible for the Public Service Loan Forgiveness Program. After making much lower payments for a number of years, your loan is completely forgiven.
Refinance the Loan
Many people think that because they have taken out a loan, they are stuck with it. That is not the case. Refinancing the loan can give you a much lower payment, which will help you put any extra money towards the loan anyway and pay it off that much quicker.
Ask for Help
If you have student loans, the chances are that your friends and family members do, too. People do not generally want to talk about their money problems, but it can be a great help to do so. When you and your loved ones put your heads together, they may give you even more tips and advice for paying them off faster, and you might be able to offer some, too.
Call a Florida Debt Defense Lawyer if You Are in Trouble
Unfortunately, the quick tips above are not always enough to keep people out of trouble when it comes to their student loans. If you are suffering from student loan debt and a lender has taken legal action against you, our Fort Lauderdale debt defense attorneys at Loan Lawyers can help. We know the defenses available in these cases and we will put our experience to work for you. Call us at (954) 807-1361 or contact us online to schedule a free consultation and to learn more about how we can help.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.