How to Quickly Repay Your Student Loan
10 Student Loan Repayment Tips
Since millions of American, including myself, graduate college each year with thousands of dollars of student loan debt, I wanted to share a few student loan repayment tips.
Even though you may have a six month grace period before you begin repaying your student loan, thoughts of student loan repayment should begin well before graduation.
Before you graduate, keep the following student loan repayments tips in mind to cut your overall education costs and speed up the repayment process.
1. Keep borrowing costs low
This tip may seem like a no brainer but with the ease of borrowing, sometimes we forget that student loans actually have to be repaid.
There are many ways to keep student loan costs down such as attending a community college, paying for tuition using a monthly payment plan, grants, scholarships and working part-time with an employer that offers tuition reimbursement.
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3. Pay while in school
Even though you don’t have to pay your student loans while you are attending school, if you can afford to send something each month then do it. If you pay your loans while in school, it will greatly reduce what you owe when you finish school.
Another way to pay your loans while in school is to apply any gift money or part-time earnings to your loan balance.
4. Open all your mail
I know I have a bad habit of setting mail to the side and then forgetting about it. When you have student loans in repayment or nearing repayment, keep a look out for mail from your student loan servicers. If you prefer, email then make sure you check your email account regularly. Also if you move, be sure to update your account.
5. Keep track of the total owed
Don’t get into the habit of just borrowing but not know your total loan debt. Since loans can be taken out for different schools and different semesters, its possible that a you can have multiple loans with different companies. Keep a good record of who you borrowed with and the total amount.
6. Develop a repayment plan
When you begin school and start taking out loans, create a repayment plan at the same time. Calculate the monthly costs of the your future loan with a loan repayment calculator and plan how you are going to go about repaying your loan. Don’t just rely on a good job or high salary to repay your loan. Think of ways to come up with additional income to pay off your loan faster.
Also review the different repayment options that your loan servicer provides. Determine if you want to make the same monthly payment, graduated payments, income based payments or extended payments.
7. Setup automatic payments
Many lenders will offer a reduced interest rate if you agree to have your payments automatically deducted from your checking or savings account. You may also be able to set up biweekly payments, which will spend up the repayment process and reduce your interest rate over the course of the loan. Another benefit of automatic payments is that your loan will always be paid on time and you don’t have to worry about mailing a check.
8. Ask for help
If you feel you can't afford your loan payments, don’t be afraid to ask for help. Your lender can offer to defer or reduce your payments for several months until you’r able to make the regular payments again. It’s better to apply for a deferment or forbearance than to ignore your loan payments. It can eventually result in a default and a negative credit history.
9. Consider consolidating your loans
Many find that consolidating their loans help them keep track of their payments and reduce their interest rate. I’ve consolidated my student loans for this very reason. However, if you have private loans you are not able to consolidate them with government loans. If you wish to keep your loans separate, consider paying the loan off with the highest interest first and then add that amount to the next highest loan.
10. Consider volunteering or public service work
Individuals who have certain circumstances may qualify to have their student loan cancelled or forgiven. Some of the qualifications include volunteer work for AmeriCorps or Peace Corps, teaching or practicing medicine in an under privileged area or military service.
Have you paid off your student loan? What helped you to pay it off faster?