How to Clear My Student Loan Debt

May 30, 2023

How to clear my student loan debt? This is one very important question you should ask yourself before seeking out for an educational loan. Just as the famous saying goes, “It is much easier said than done,” student loans can really be a thorn in the flesh when it comes to clearing them. And in this post, I will be sharing some very useful tips for clearing off your student loan debt successfully.

How to Clear My Student Loan Debt

While many experts state that you really cannot put a price on a good education, plenty of graduates today are stuck in paying off their student loans while still trying to save for a house, pay their bills, and even start a family. And while the standard repayment term for a federal loan is 10 years, the whole repayment process can get to take up to 30 years with many options. And if it is that you are really feeling the heat and kind of overwhelmed, you should try these tips for paying off your student loans quickly.

Make Additional Payments

If really you can afford it, then you should make larger payments to cut the principal more quickly and then reduce the total payoff time. By reducing the principal balance, you simply are minimizing the duration of the loan period as well as the interest accrued.

For instance, a $25,000 student loan with a 6.8 percent interest rate and a 10-year repayment period would eventually cost $288 a month. Making use of a student loan calculator, you can easily see that paying $400 a month instead of $288 will enable the borrower to repay the loan in less than seven years.

Set Up Automatic Payments

It may be really tempting to apply any sum that you have left over at the end of the month to your student loans. But if you have a tight budget and you do not tend to have any extra at the end of the month, doing so could simply mean slowing the pace of your payment.

If it is that you are unsure of how much more you can devote to your student loans each month, then you should take a close look at your budget in order to determine the amount that you can afford.

Then, you should set up automatic payments for the start of the month. That way, you will not spend that money accidentally. You also should take care when setting up your payment amount in order to avoid spreading your budget too thin.

Limit Your Debt with a Part-Time Job

Getting a part-time job all the while you are attending college is one key and important way to keep college debt in check, simply because you can use those earnings to reduce just how much you get to borrow in the first place and then make your repayment plan that much easier. You also can earn up to $7,040 a year without getting to affect your eligibility for need-based financial aid.

You should check with your school’s resources or career center to see if they are hiring for any on-campus jobs. On-campus jobs as you should know tend to be more understanding of unusual or busy class schedules. Online jobs on the other hand are also more abundant than ever, thus giving you even more opportunities that easily work with your schedule as well as your skillset. And between school years, you can take full-time summer jobs to even earn more.

Stick to a budget

Planning and also understanding your cash flow for every month can make it very much easier to know where you can easily cut back and then relocate those very funds toward your student loans. You should also do an assessment of your spending habits as well as your ability to keep a budget. If it is that you find it difficult to maintain and keep a budget, then you should make use of a student budget calculator to help you effectively get and stay on track.

Consider Refinancing Options

Refinancing your student loans could effectively help you to pay down your student loans quicker simply by helping you obtain a lower interest rate, and a shorter repayment period or even both.

You should however note that this very option may not be available right after you graduate unless you have managed to build a solid credit history or you have a creditworthy co-signer. If this is not the case, it can take some time to establish your credit history and then meet up to the eligibility criteria for refinance lenders. Many lenders will also require you to have a stable income or an employment history to qualify.

If you get to refinance federal student loans, then you will lose access to certain benefits, and this is including student loan forgiveness programs as well as income-driven repayment plans.

Before you think of refinancing, you should shop around with a couple of lenders to see which of them offers you the best rates. You also can make use of a student loan refinance calculator to understand the numbers and whether it is the right move for you.

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