6 Steps To Paying Off Student Loans [It’s Possible!]
Student loan debt is a huge problem in America. In fact, according to the Federal Reserve Bank of New York, student loan debt has surpassed credit card debt as the largest form of consumer debt.
With the right strategies and the steady job in hand, you could clear the debts sooner than you think. Here is an article to guide you with six simple steps to pay off loans quicker.
Step 1 – Pay More Than The Minimum Amount
One of the simplest methods to pay off student loans is to make more than the minimum payment each month. While you make regular monthly payments, you’re nowhere close to clearing the debts you borrowed, and if you look at the added monthly interest, you may just be paying off the interest and never touching the principal.
A Standard Repayment Plan is another payment plan you could choose to repay the federal student loans faster by making extra payments for a fixed period. The repayment period could be ten years or a federal loan unless you choose a different period.
Step 2 – Choose The Standard Repayment Plan
Step 3 – Aim For A Loan Forgiveness Program
A Loan Forgiveness Program is a dream come true for many to become debt-free. You can take advantage of this program if you work for a government sector or a non-profit organization.
Step 4 – Consolidating Or Refinancing Student Loans
Consolidating your student loans means you combine all of your loans into one with a, hopefully, lower interest rate. Consolidation can help you manage your loans better by paying them all at once with one payment.
Step 5 – Try Making High Payments
Saving money and using it to repay your loans is difficult but the best method. Instead of spending on clothes or a trip, putting everything towards your loan can help you save thousands of dollars over the life of your loan, as well as the time it takes to pay it off.
Step 6 – Make Use Of The Interest Rate Reduction
Certain private loan servicers offer an interest rate reduction of about 0.25% to cut down the total cost while repaying the loan. This option is provided when you sign up for an automatic loan payment plan.
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