While getting your first job is an exhilarating experience, one factor which could dampen your spirits is knowing that you have a huge student loan to pay off. Student loans tend to eat into your paycheck. According to some statistics, the total amount of money owed in the country for student loans averages to around $1.4 trillion. So, how does one clear their student loans in the quickest way possible? Here are some tips for repaying your student loans quickly.
Get your payments organized
The first step towards repaying your student loans is adequate planning. Get a copy of your credit report to see where you stand and find your due dates. Set up automatic payments so that you never get behind schedule. Most importantly, visit your bank to check what kind of help you can get for the repayment terms. Most students are unaware that banks can help change due dates to ones that suit the borrower better. Some banks even offer an option to temporarily postpone payments by a few months to help you if you’re facing financial problems. Take advantage of these benefits as far as possible.
Pay more than minimum amount due
One of the most effective ways to pay off your student loan quickly is to pay more than the minimum amount that is due. It can seem hard at first, but it will help in the long run. Increase your automatic payment amounts every month so that your loan gets over sooner than expected. It might mean cutting down on that extra bit of shopping or seeing one less movie every month, but it will be worth it in the long run.
Consolidate and refinance
If you have multiple student loans, the best way to go about settling them is by consolidating and refinancing. Refinancing helps reduce your monthly payment as well as lowers your interest rate. Do not hesitate to call your bank and ask for a lower interest rate. Alternatively, do a bit of research and shop around for the best deals. It will help you get the best interest rate on your loan. Many student loan refinancing options are available with interest rates as low as 3 percent.
Take advantage of tax benefits
Most students do not know that having a student loan qualifies you for an interest deduction on your federal tax. This deduction can let you reduce your taxable income by up to $2,500. Know and use this to your advantage to save some extra money which will help you repay your student loans efficiently.
Take a loan forgiveness job
Some jobs offer partial or complete forgiveness of student loans under the Federal Loan Forgiveness Programs. These jobs do not pay well but allow you to get your loan amount forgiven if you meet the set criteria. Some positions that fall in this purview include public service worker, federal agency employee, nurse, teacher, doctor, dentist, and AmeriCorps, Peace Corps, and other volunteering jobs.
