The time that you spend as a student can be fun and exciting, but if you have borrowed a lot of money to get through school, the time comes when you must repay those loans. It is important to pay these off as fast as you can so they are not looming over your head and collecting interest for years into the future.
Here are 7 tips for paying off student loans:
1. Be prepared to make some sacrifices. It’s difficult to see friends in the same age bracket making large purchases like new cars and first homes, and spending money on vacations is always a tempting splurge. However, you have to understand what you can and can’t afford. Make sure that you meet obligations like student loans and credit card bills by making your monthly payment every month on time.
2. Don’t ignore your debt. Many students put off paying the debt for a long time and eventually forget about it. The next thing that will happen is that they hear from a collection agency because their payments are overdue. Start paying your student loan back as soon as possible.
3. Keep your contact information current so that the lender can contact you quickly. Your goal is to repay debt, not to hide from those to whom you owe money. You are probably quite young and will move many times in a short span, so you need to keep your debtor in the loop with current contact information.
4. If you can afford it, pay more than the minimum payment. An even better plan is to double up on payments if possible. The more money you put towards your student loan, the faster it will be paid off. Interest continues to accrue on your loan, so the bigger the balance, the more interest you are paying.
5. If your payments are monthly, consider switching them to bi-weekly. The amounts may be slightly higher, but you will pay the loan off a little bit faster than if you were paying once monthly.
6. There may be some tax deductions that you are eligible for at tax time. Take advantage of those and apply any tax refund to your student loan to reduce the balance even further.
7. Consider a consolidation loan if you have several student loans. Consolidation loans will give you a single payment instead of many payments that are easier to keep track of and easier to pay off faster.
Once your student loans are paid off you will have a clean slate and good credit rating as long as you pay all of your loans on time, without fail. If you find yourself having a hard time meeting your payment obligations, always get in touch with the lender to discuss alternate arrangements.