Student loan debt has become a major problem in the U.S., affecting millions of Americans. If you’re struggling to repay your loans, you might want to consider refinancing or consolidating them.
Student loan debt is currently at $1.5 trillion, and it continues to rise every year. The average student borrower now owes over $37,000. This means that even though students graduate with higher degrees, they often don’t earn enough to cover their payments. Add in the fact that student loans often come with incredibly high-interest rates, and your best option is to get your student loans paid back as soon as possible.
If you’re worried about your student loan debts and want to make sure they get paid off quickly, then you’re in luck. In this article, we’ll take you through the best ways to pay off your student debt fast!
How Are Student Loans Repaid?
The first thing you need to know is how your student loans are paid back in the first place. Most federal student loans have an income-based repayment plan, which allows borrowers to pay back their loans based on what they can afford each month. The rate at which you pay your student loan back is typically based on your income, with higher-earners paying off more with each installment.
However, that isn’t the only way you can pay back your education debts. Private lenders also offer alternative payment plans for those who struggle to keep up with their monthly payments. You may be able to refinance your student loans if you find yourself unable to meet your obligations.
Other options include making additional payments, adjusting your installment frequency (which means that you make more payments without necessarily increasing the amount you pay monthly), and prioritizing loans with the highest interest rate to prevent them from snowballing out of control. To help you figure out the best ways for you to pay off your student loan as quickly as possible, here are some of the best methods to use.
How To Pay Off Your Student Loan Fast
As mentioned before, there are several strategies that you can use to ease the burden of student loan debt and pay back your loans more quickly. Here is a breakdown of some of the best plans of attack.
1. Pay More Than Minimum Payments
One of the most effective ways to speed up the process of repaying your student loans is by paying more than the minimum payments. By doing so, you will not only reduce the total amount of money you owe but will also lower your overall interest rate. This method works especially well when combined with other strategies like refinancing or consolidating your loans.
Paying above the minimum can be hard if you’re already struggling financially, but you can ease the burden by subsidizing your regular payments with additional money from selling old unwanted possessions, renting out a spare room, or picking up a side hustle.
2. Consolidate Your Debt
Another great strategy to pay off your student loans faster is to consolidate your debt into one single loan. Doing so will allow you to spread out your payments over a longer period of time, thus reducing the total amount you owe. It is important to note, however, that consolidation does not always work.
For example, if you already have a low credit score, then you might not qualify for a new loan. If that happens, you should consider using an alternate strategy instead.
3. Organize Your Debts By Interest Rates
The high-interest rates on student loans can make them feel impossible to repay. If it feels like your debt is increasing by more than you’re paying off, a great way to combat this is by organizing your debts by their interest rates.
In this case, you would prioritize your loans with the highest interest rates first. Once all of those loans are paid off, move on to the next highest rate until all of your debt has been repaid. This will help you to manage the amount of money you owe, while also keeping you on top of the debts with the highest interest rates so you don’t get swamped by increasing debts.
4. Refinance Your Student Loans
Another great way to pay off your student debts is to refinance your loans. Refinancing is similar to consolidating in that it combines multiple individual loans into one larger loan.
However, unlike consolidation, refinancing doesn’t affect your credit score. Instead, it simply lowers the interest rate on your existing loans. As such, this method is often used by people who want to avoid having to take out another loan.
5. Switch To Biweekly Payments
While biweekly payments may seem counterintuitive, they actually work very well for many borrowers. The reason why biweekly payments work so well is that they give you the opportunity to catch up on any missed payments and stay on top of how much money you’re repaying. This is particularly useful if you’ve fallen behind on your payments. When making biweekly payments, you’ll be able to keep track of exactly how much money you need to pay each month.
This allows you to set aside extra funds every two weeks to cover any outstanding balance. Additionally, paying biweekly gives you more opportunities to pay extra, while not necessarily requiring you to pay off more than you can.
Student loan debts can feel like the weight of the world is on your shoulders, but by paying them off as soon as you can you don’t need to worry about your debts piling up. By following the tips in this guide you can help yourself manage, organize, and repay your student loans as soon as possible.
Paying off your student loans might seem hard at first, but with the proper techniques, you can stay on top of your debt without having to sell all your belongings just to keep up with the interest rates. So all you need to do is implement these strategies, and watch your student loan debt disappear in no time!