Four tips for faster student loan repayments
Updated on October 29, 2019
Paying back a student loan is a challenge for most college graduates. A recent study by Forbes reported that there are currently 45 million graduates with a combined student loan debt of more than $1.5 trillion. The figures blatantly reveal the extent of the current student debt crisis and how many students are struggling to repay their loans.
If you are struggling to pay your student loan, the below tips may help you! The faster you pay your loan, the lower interest you will pay overall, helping you to save money.
1. Do not settle for the minimum
While paying the minimum monthly installment may be tempting, strive to make bigger payments. You can do this by placing additional funds to pay off your loan rather than into a savings account. While you may wish to begin to save for things such as a house, it makes much more sense to begin to do this after your loan has been paid off.
2. Spread your payments
Another trick is to spread your monthly payment across multiple days of the month, for example, if you are required to pay $200 a month, you can pay $100 on the 1st of the month, $50 on the 15th and $50 on the 29th, this will allow you to budget with more freedom as you can structure your payments around your payday and any other payments you have to make.
3. Sign up for automatic payment
When you sign up for auto-pay, your loan provider will have access to your bank and automatically deduct the expected remittance every month. This may help you to pay off your loan at a better rate as it will ensure you do not miss payments and always pay on time. While this may not dramatically increase the rate you pay off your loan, it will keep you on a steady track.
4. Work for a company that provides repayment assistance
Employers are slowly embracing student loan repayment assistance employee benefits. Such companies will give you money towards student loan repayment when you work with them. So if you are looking to change jobs, consider a company with such benefits. You may also be able to volunteer at such a company and get assistance in repaying your student loan.