With reports that there are individuals in their 50s and 60s who are still unable to pay off their student loans, many individuals are looking for ways to pay off their student loans faster and more efficiently. Luckily, there are a few tricks that can make even the most considerable student loan debt manageable.
Avoid Deferrals
If it is at all possible, individuals should avoid taking advantage of deferral and forbearance options on their student loan. While it can be tempting to push back payments until income improves, each month that passes increases the amount of interest students owe on their loans. Students are only given six months after graduation before interest begins to accrue. Deferrals do not stop that interest from adding up, and even a short forbearance can cost a good deal more than the monthly payment would have. It is best for individuals to find ways to make the minimum payments each month, if at all possible in order to pay off the full amount sooner and less expensively.
Accelerate Payments
If students can afford to make more than their minimum payments, they should definitely pay more than they are asked. Most standard payment plans front load the interest, but that amount is estimated on a given payment schedule. If the student can get ahead of that schedule even by only a few hundred dollars over the course of several months, this can cut down on the amount of interest owed. This can mean even more months cut off the anticipated payment schedule and getting the total loan paid off at a much faster rate.
Renegotiate Rates
Some student loan companies may also be willing to renegotiate the interest rates on their student loans if Federal rates drop. Many Federal loans are already set at the lowest rates possible so it may not be possible to change them, but because the national rates fluctuate over time, other companies may be willing to renegotiate the established interest to reflect the new lower rates. Individuals can shop around their loans as well to find the lowest interest possible. Several companies like Sallie Mae are willing to buy individual loans from other companies so students are not locked into their original loan company.
Creative Solutions
There are also some amazingly creative solutions for those looking for more unconventional means of paying down their debt. A company called Smarterbucks partners with credit card and debit card companies to allow customers to use rewards to pay down their student loans. With every swipe of their card on everyday purchases, a small percentage of that purchase goes directly toward the principal of the customer’s student loan. While this solution will never pay down any debt alone, every small additional payment means less interest to be paid in the future.
Individuals should seek out their own creative solutions for paying off student loans faster. By making such debt payments a priority in every budget, it is possible that some individuals could pay down their entire debt in years, rather than in decades.
