Today’s post is courtesy of Drew Cloud. Drew Cloud is an entrepreneurial journalist who focuses on student loans and other financial topics. He created The Student Loan Report after he was sick and tired of freelance writing for other websites. Now he pours his heart and soul in journalism and student loans.
Student loan debt can be quite overwhelming, especially right after you graduate and your loans become payable. Before you find yourself surrounded in debt with no way to crawl out of it, make sure that you take a few steps to help pay off some of those loans faster. This can not only help when it comes to getting your debt paid quicker, but it will also help when it comes to your credit. Good payment history is ideal for your credit, but if you can pay more towards the balance each month and cut down on your income to debt ratio, it will help to improve your score even more. Here are some ideas to help you free up some money to put towards those daunting student loans.
Consider Choosing an Income-Driven Repayment Plan (IDR)
One of the first things that you may consider is an income driven repayment plan, or IDR. These programs are offered by the federal government and allow debtors to pay what they can afford each month, based on how much they get paid. This is ideal because it can help to lower your minimum amount each month, while still allowing you to chip away at the total debt. While it isn’t the most ideal solution, and won’t help you pay it off any faster, it will keep you on the right track and keep you out of default with your loans. The real kicker here is that you could potentially qualify for student loan forgiveness down the road, but you may want to make sure that is a true reality before signing up.
Extend Your Repayment Terms with a Federal Consolidation Loan
A federal consolidation loan may also help when it comes to making your student loan payments each month. How many student loans do you actually have? Did you know that many graduates have upwards of 15 different loans that they must pay towards after they graduate? This can be quite overwhelming. With a federal consolidation loan, you can consolidate these loans into one monthly loan that can be paid with a single payment each month. By doing this, you won’t necessarily pay less over time or pay it off faster, but as with the IDR plans, it can help to keep you in good standing with your loans.
Obtain a Lower Interest Rate Through Private Refinancing
If you have ideal credit, then you can really do some damage to your student loan debt! Through private refinancing, you can actually lock in a lower interest rate and better term length. This is one of the best ways to pay off your balances for your debts fast. If you have a good amount of income coming in each month, it may be well worth it for you to consider refinancing. Check into private lenders and see what they have to offer. If you can lower your rate, you will find that you will save a great deal of money over the life of your loan.
Budget Wisely So That You Can Pay More Towards Your Loans Each Month
Another great idea is to make, and stick to, a budget. Try to budget some extra money each month to go towards those loans. The faster you pay it off, the less you will pay in interest. Not everyone can afford to commit to a larger monthly payment with a shorter term, but just about anyone can apply extra to their principle if they budget wisely and stick to it. Keep a track of your expenses, income and other financial obligations. Stay organized, and be sure to stay driven when it comes to paying off your loans. It is easy to get complacent, but if you do you may find yourself paying on those loans for quite a while.
Get a Side Job to Have More Money Coming in Each Month
If you find that you just don’t have enough money to make ends meet each month, you may consider getting a side job. You don’t have to work two full time jobs, but any extra bit that you can earn and apply towards your loans will help a great deal. You may even find some side gigs that you can do from home, still allowing you to have the freedom of your time while being able to make some extra money.
As you can see, there are some ways that you can pay your student loan debt off faster. The problem is that you have to take the first step. Use these tips to help you get started with paying down those loans and freeing up some extra money to put towards them. You will thank yourself in the long run when you are able to focus on your financial future, without having to drag your student debt behind you the whole way.
Drew Cloud is an entrepreneurial journalist who focuses on student loans and other financial topics. He created The Student Loan Report after he was sick and tired of freelance writing for other websites. Now he pours his heart and soul in journalism and student loans.