While there isn’t a magic cure for paying off your student loans, there are some ways that are easier than others. Using just a few ideas will help you to pay your debt off with less stress, and can save you quite a bit of money over time.
Gather up a list of all of your debts, student loans, credit cards, and any other money you owe. Make sure you understand everything that you have agreed to in taking on these debts, including the deadlines for payments, and any fees you may incur from late payment. Make sure you are aware of the different interest rates on all your loans. Once you have all of this information, prioritize your loans, and focus on paying of the ones with the most restrictive fees and highest interest rates first.
If at all possible, start paying loans back before graduation. If these are federal loans, there is never any kind of penalty for doing this. However, some private loans may have a penalty for paying early, so double check with the lender. The faster payment begins, the less interest your loan will accumulate. In the end, this is cheaper than waiting until finishing school to start paying the debt off.
Pay Above the Minimum Monthly Payment
On any federal loan it is possible, and preferable, to pay higher payments to get out of debt as quickly and cheaply as possible. There are some exceptions on private loans, but it varies bank to bank. If you’re not sure about this, contact your bank, and ask if you can pay your loans off early without penalty. This is a smart idea because the larger the outstanding balance is, the more the interest will accumulate. The faster the outstanding balance is paid down, the less it will cost you in the long run.
Live Below Your Means
After college when a student is finally able to work full time, the urge to cut loose will be pretty strong for most people. Resist that urge as much as possible. Instead, choose one or two luxuries that you really love to splurge on. Give yourself a small allowance to indulge yourself, while still being able to pay above your minimum payment on the loan. This will prevent feelings of deprivation, while still being fiscally responsible.
Look into Cost Reduction Programs
The qualifications for these can be very specific to the situation, but they’re worth looking into. First, ask your employer as some companies offer help paying for educational loans. For people whose chosen profession is in the medical industries, there are programs that will forgive huge chunks of debt in exchange for work in needy areas. Teachers willing to work in low income schools can receive debt cancellation on up to $5,000, as long as their debt comes from a Stafford loan.