Overdue on Your Student Loans? Five Tips for paying them Off Quickly
Student loans can be a burden especially for young college graduates. After graduation, graduates are given six months until student loans become mandatory to pay. There are options like deferring them and getting extensions, but that just piles on more even more interest.
Student loans can add up from anywhere to $5,000 to a ridiculous $65,000 but regardless of the amount, graduates must face reality because student loans have to be paid. As long as you have a plan in place to pay off the loans then you are in good shape. If you haven’t quite gotten around to creating a strategic plan, and the clock is ticking on your student loans as they only get more expensive with interest, take a look at a few of the following tips to help you pay them off quickly.
Pay More than the Minimum Payment
Paying the minimum payment will only cover what you owe for the current month. To pay off those student loans quicker than you normally would, put more than the minimum payment towards the monthly bill. Paying more than the minimum payment will knock the interest down quickly because you are decreasing the principle amount—making the interest you are paying overall much lower.
Pay More Than Once
Paying more than once can definitely be beneficial as well. Just like paying more than the minimum payment, paying more than once a month brings the interest down and provides the overall feeling of the loan being paid off quickly. Matthew Burr of Business Insider even suggests to pay the loan six or seven times a month in order to keep the interest down. Paying student loans aggressively is recommended if paying them off quickly is the goal.
Make a Budget
Creating a budget is obviously a great way to keep everything on track, especially bills. Ensuring that $100-200 is set aside to make sure that student loan is paid is essential. This way, it is easier to view what available funds can be taken from other bills to possibly pay more on student loans. Setting a budget can be as easy as writing it down on a piece of paper but if you are technologically savvy, then you may want to use the many computer software’s and templates built into programs like Excel via Microsoft Office or the Numbers application on MacBooks.
Don’t Use Credit Cards
If you don’t think the interest on those student loans are piling quick enough, wait until the no-interest rate is expelled on the credit card you just maxed out. Credit card companies aggressively add on interest rates to credit card balances in attempt to get more money. They know most of their users can’t pay back the money available on the credit card, so after the few months of no interest, they will hunt you down. Now you have and outstanding balance on your credit card and student loans. Which one do you pay off now?
As a college graduate, you are probably familiar with goal setting. Well, the same process should be applied to paying off student loans. Short term goals could be paying off that additional interest and a long term goal could consist of paying off the entire loan in three years. This will keep individuals motivated to accomplish such a goal. When the balance finally says 0, it’ll be a dream come true.
While those student loans can be a nightmare for some, if you have a goal set in place, you are headed in the right direction. Start attacking your payments now, and using the tips above you can once again gain control over your life without having the dark cloud of student debt hanging over your head.