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10 Tips for Paying off Student Loans Faster

10 Tips for Paying off Student Loans Faster

Are you one of the 44.5 million Americans sporting student loan debt? According to the latest Federal Reserve statistics, outstanding student loan debt now tops more than $1.5 trillion, and 66 percent of the individuals with a tab are 30 or older.

A college education is said to be the ticket to better jobs and more earning potential, but it comes with a hefty price tag. If you’re trying to knock out your student loan debt, here are a few tips to do it smarter and faster.

  1. Know what you owe. Take a quick assessment and see how much debt you have and jot down the interest rate you are paying on each. What are your monthly payments? How long will it take you to pay off your existing loans with your current agreements?
  2. Consider loan consolidation and refinancing. Maybe you can lock in a lower interest rate. However, know that when you refinance your loans, you can only do so with private loan options. If you consolidate your government loans, you might lose some of the benefits like income-driven repayment plans and loan forgiveness. Do the math and weigh the benefits.
  3. Pay more than the minimum. Every extra dollar you apply to principal of your loan means less interest you will ultimately pay in the long run. Stretch yourself.
  4. Make an extra payment each year. Like rounding up and paying more each month, dig in and pay an entire extra payment in the calendar year. This could save months–or even years–on your total payment plan.
  5. Live with the parents. Some individuals opt to spend an extra year or two at home with mom and dad to save money on rent. With the savings, allocate a significant portion of your earnings toward your loan debt. Be aggressive and knock it out.
  6. Get frugal. Outside of living with the parents, look at all other aspects of your budget. Don’t get sucked into spending big on fancy cars or eating out. It’s easier to be frugal in your early years when there are not as many financial demands or dependents relying on your income.
  7. Side hustle and save. If your full-time job is not providing you with adequate funds to aggressively pay off your loans, look at doing a side gig to direct more money toward your debt. Be a ride-share driver, babysit, walk dogs. Your short-term hustle can get you closer to a zero balance in student loan debt.
  8. Use extra windfalls and bonuses toward the loans. It might be a little painful to take a big bonus check or unexpected windfall and drop it 100 percent toward your student loan, but this is likely the quickest way to make significant dents in the total balance.
  9. Look at jobs or companies who will help with your loans. Since companies are very aware of the student loan crisis, many have started to establish compensation programs that include incentives and programs to pay off loans. Do some research and consider a few of these companies to help you chip away at the debt faster.
  10. Pay on time. If nothing else, pay your bills on time. Late payments and missed payments translate into extra fees and penalties, and ultimately dings to your credit report. A damaged credit report means you’ll pay more for everything in the future in the form of higher rates and less attractive loan terms. In many cases, a student loan is now one of the first tradelines to be on an individual’s credit report–so if you manage your student loans well, it can benefit you greatly. Fail to pay and the reverse will happen.

Learn more about UNIFY’s student loan options.

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