In 2019, the total amount of outstanding student loans soared to an all-time high of $1.5 trillion. More than 44 million Americans share this loan. It is a symbol of a dysfunctional educational system when families cannot afford to send their children to college or university. The figure is an increase of more than 100% 10 years ago. It also signals a 6% increase from 2018.
Americans spend a better part of their working years paying off the government for these loans. Getting approved by a mortgage lender in Boston or other cities can be difficult because of these existing loans. The interest in house loans tends to be higher. It disables many Americans from buying houses for their families.
There are ways to pay off these debts faster. You can get rid of the loan and spend your money on something more fun. You don’t have to suffer through years of student loan repayments. You can take charge right now.
Make Extra Payments
It will help if you can make extra payments on your loans. Don’t just pay off the minimum amount due. This will not help lower the principal amount faster. By making an extra $100 payment a month, you can lower down the balance of the loan. It will make you finish it off faster, too. You will pay less interest since the computation of your payments is based on the principal amount.
You can pay extra from your tax refund or your yearly bonus from work. Coming up with extra cash should be easy. You can organize a garage sale and help with recycling. These can get you extra cash that you can use to pay off your student loans.
Sign up for Automatic Payments
You can sign up for automatic payments and receive discounts on interests because you have done so. You’re making sure that you pay the debt on time and you’re also getting discounts for never missing a deadline. What more can you ask for? You’re assuring the lender that you’re going to make the payments on time. As a result, the lender will give you a discount for enrolling in the program.
Refinance Your Loan
Do you know that you can refinance your student loan? This means paying off the old loan by applying for a new one with lower interest and shorter term. This method will allow you to finish off the student debt, which usually has a higher interest rate and longer term. You’ll be paying more every month, but that also means finishing the loan earlier and for a lower interest rate.
Look for Jobs with Student Loan Repayment Schemes
There are a handful of companies that offer a student loan repayment scheme. These companies aim to help their employees with outstanding student debt finish paying their loans. It is not much—about $500 to $10,000 a year, depending on your level in the company—but it will help fulfill the goal of freeing yourself from student debts.
Student loans are annoying. Imagine putting in $300 a month for a debt that will last for years. But it’s important to remember that there are more urgent loans that you have to pay such as your credit card and car mortgage. These loans have higher interest rates and shorter terms. You need to pay them off to free yourself from the feeling of drowning in debts.