You may feel overwhelmed by the idea of paying off your student loans after you graduate from college. You have a few more months to go before you start making payments, but it will happen.
You are starting out in the world of work, so it’s even more stressful. There is light at the other end of the dark tunnel.
If you do it correctly, the process of repaying your student loan can be simplified.
Every person is unique and has their own situation, including the amount of student loan debt they have to pay back. It’s important to not compare yourself with others who have loans, and instead create your own repayment schedule.
You may find it useful to learn some quick and easy tips on how to pay back your student loan quickly.
Table of Contents
Create a Budget
Prioritize Debt Payments
Create a payment plan right away
Refinance your mortgage or consolidate it
You can increase your payment contributions
Be Patient
Final Thoughts
Create a Budget
Postgrads will have an idea of what it’s like to live on a budget. After you have landed your first position, creating a budget is crucial to determining how you will support your new lifestyle.
Calculate the ratio of your income and debt to make sure you’re not spending more than you earn. Find areas where you can cut back and live within your means.
Track your budget with tools like Excel or Intuit Mint.
You can also stay on track by placing reminders for bill payments in your phone, with alerts. Use the technology available to you to stay on top of your game and manage your budget.
You may have noticed that I am not a big fan of budgeting or even obsessed with it. There are some situations where a budget can be crucial. Paying student loans is an example of this.
Prioritize Debt Payments
Pay off your credit card debt first, as it is likely to have a higher interest rate. You will pay less interest if you pay off your high-interest debts.
After you have paid off your card with the highest interest rate, pay the same amount on the next card. Continue this process until you have paid off all your credit card debt. Limit your credit card use in the interim. This will improve your credit rating and prevent your debt from growing.
Dave Ramsey popularized the debt snowball. Pay off the smallest debt. Next, move on to the slightly larger debt.
This approach can be used to repay student loans as well.
Create a payment plan right away
Keep track of all emails and mail that pertain to your student loan payments.
Track the date of your loan’s end to avoid late fees or default. If you don’t keep track of your loan repayments, it can lead to a lower credit score. To get a good credit score, you must pay off student loans.
If this happens, you can easily rebuild your credit.
Set up automatic payments with your bank once you know your grace period is ending. Your loan payment will be taken automatically from your paycheck.
The entire process can save you time and ensure that your payments are made on time.
The total amount of student loans in the United States is $1.56 trillion, which is spread across 45 million borrowers. This is about $521 billion higher than the total U.S. debt on credit cards.” (Student loan Hero)
Refinance your mortgage or consolidate it
You may find that as you start making regular payments on your loan, your interest rate or amount is keeping you from repaying your loan as fast as you’d like.
You should research alternative lenders before refinancing your loan to ensure that you can make payments more comfortably. Before making a final decision, consider the loan repayment period, interest rate and monthly payment.
You can consolidate all your loans to make it easier to pay them. A loan consolidation could lower your monthly payment and lower the interest rate.
Credible is a great resource for anyone interested in refinancing their student loans. Credible is one of the easiest and most trusted platforms to use. Compare student loan refinancing from up to eight lenders without impacting your credit score. 100% free. If you’re looking to save money, click here for more information.
You can increase your payment contributions
If you can, increase your monthly payments. You could add $50 a month to your repayments.
It is obvious that this option will not be feasible for all, especially if your monthly payments are already quite high.
If you can, or if you make more money, pay off your student loan faster.
You can start by doing it every now and then, but not monthly. Consider adding the extra money you make from side hustles to your monthly payment.
You can pay off your student loan faster if you are able to get a little above the interest rate. To close out my student loans, I began to do this.
Be Patient
Even though the title says “quicker”, it can still take some time to pay off student loans. Even if you don’t make six figures or have family help with finances, it will still take some time to pay off student loans.
Keep going! You can find a lot of stories about people who have paid off their student loans.
Don’t be frustrated. Everyone’s situation is different. Apply the tips above to increase your student loan payment.
Final Thoughts
You can take control of your finances by staying on top of student loans, saving and weighing your repayment options.
How you pay off student loans is a personal decision.
Select tips that are more aligned with your own process or use them all. You can choose any direction and you will be on the way to paying off debt faster.
