Approximately 1 in every 8 Americans carry student loan debt around with them. that’s 42.9 million Americans hanging on to student loan balances for dear life (according to data from the U.S. Department of Education). If you are one of the many who feel like your student loan debt is holding you back from approaching your financial life in a healthy way, consider a few recommended methods for paying off student loan debt as quickly as possible.
Make Extra Payments, But Give Instructions
You may feel it’s obvious that if you want to pay off your student loan debt faster, you pay more than the minimum each month. You wouldn’t be wrong, but when paying extra toward your student loan balance, it’s best to do so with some extra instruction. While there are no penalties for paying student loans off early or making payments larger than the minimum, loan servicers generally apply any extra payment toward the next month’s payment. Doing so advances your due date, but does not pay the debt off faster. To pay your student loan debt off faster, reach out to your loan servicer (by phone, email or mail) and ask that they apply any overpayments to the current balance, and keep the next month’s due date in place according to schedule.
Consider Refinancing Options
Refinancing your student loans can be a big help in paying them off fast without extra payments. By refinancing you can replace multiple student loans with one single private loan (hopefully at a lower interest rate). When refinancing, you can choose a new loan term that is less than what’s left on your current loans to speed up repayment even more (this could increase your monthly payment, but it will help pay the debt off quicker and decrease the amount of interest you pay). However, refinancing isn’t an option in every situation since you do need to have good credit and a steady job to get approved.
Consider the Benefits of Enrolling in Autopay
Federal student loan servicers offer a quarter-point interest rate discount if you enroll in autopay; which allows them to automatically deduct your payments from your bank account on the due date. If you work with a private lender, check to see if they offer a similar interest rate deduction – many of them do.
Think About Making Biweekly Payments
This method is a bit tricky, since it actually tricks you into making more than your minimum payment each month. Instead of paying your amount due on the due date each month, pay half of the monthly minimum payment every two weeks. By doing so, you end up making one extra payment each year, which decreases the time necessary to repay the debt as well as the amount you end up paying in interest.
Find Out About Any Beneficial Employee Benefits
Some companies offer to pay off student loans to their employees as part of their benefits package. If you aren’t sure if your company offers anything similar, find out. Ask if the company offers an employer student loan repayment program. If they do, take advantage of it and enroll immediately.
Student loan debt can be debilitating – particularly when it is only a portion of a larger mountain of debt. Consider how to address the situation and make a concentrated effort leading straight to your financial goals. If you need help addressing a larger debt situation, bankruptcy could help.
If you have questions about filing Tennessee or Georgia bankruptcy and you want to discuss how bankruptcy can help you stay on top of your student loan payments, get in touch with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.