Tips to Help Pay Student Debt Faster

Paying Back Student Debt Faster

Paying Back Student Debt Faster

The cost of going to college continues to increase.  It has reached the stage that some economists suggest student debt is having a stifling effect on the United States economy.  For many students, paying back their college debt can take decades.  For other students the debt can stop them buying a house and building a solid financial future.

Here are some useful tips which can help you pay back your college debt faster.

1. Understand Your Debt

You may have different loans from different sources.  Read the fine print and determine exactly what each loan requires from you.  There may be different interest rates attached the debts, different penalty and fee structures.  Are the interest rates fixed or variable?  Are there different grace periods attached to the loans?  The better you can understand the specifics of your debt, the more easily you can work with it.  It may be beneficial to aggressively pay off one debt before another.

If you have credit card debt as well as student loans, work them into the equation, credit card debt is usually very dangerous.

2. Look For Assistance

There are a number of government run programs which can help you manage your debts and consolidate your student debts.  There is also free advice for students from these websites.   You may be eligible for eligible for public service loan forgiveness where you work for the public service in return for student debts being cancelled.

3. Use Unexpected Money and Tax Refunds to Pay Down Debt

If you have an unexpected windfall or tax refund, use it to pay down your student loans.  It is one way to really bite into the loan amount and shave months or years off of the loan duration.

4.  Automate Payments

Make things simpler for yourself by having repayments come out of your bank account automatically.  This ensures that you don’t forget a loan repayment and damage your credit rating.  Additionally, some debtors offer a discount if you use automatic repayments.  It will also guarantee that you don’t spend the money on something else!

5. Continue to Save

It is crucial that you continue to save and build an emergency fund.  Unexpected events happen and you don’t want to be forced to miss student loan repayments.  So focus on building an emergency fund so those unexpected problems don’t hinder your ability to maintain your loans.  Continue to save for your retirement and future large purchases, like a home deposit.  Even if you can only afford a few dollars per week, it is important to build wealth and move forward.

6.  Get a Job Quickly, Even if it’s Not Perfect

The quicker you can start paying off your loans the better.  If you have employment opportunity take it, even if it’s not the perfect job for you.  You can continue to apply for other jobs, but in the meantime you are paying down your loans.

7.  Volunteer to Reduce Your Debt

Some volunteer organisations have schemes where you volunteer and have your loan partially paid down.  If you are struggling to find full time work, volunteering for the peace corps is a great way to give back to the community and keep paying down your debt.

8.  Earn More and Spend Less

Take another look at your budget.  Think about ways to earn more and spend less.  You may be able to obtain another $250 a month by teaching maths, mowing lawns, cleaning houses.  That money can go directly into your student loans and accelerate the speed that you rid yourself of the debt.  By being financially prudent, you can spot all kinds of savings within your budget.

Never give up!

It can seem like a daunting task, but if you persist, momentum builds.  Before you know it, the stress of your student loans will be a thing of the past!

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