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5 Tips to Pay Off Your Student Loans Faster

Do you want to pay off your student loans faster in 2018? These tips, including student loan calculator, will help you pay off your debt faster.

Last year, I spoke with an old friend from graduate school who had been unemployed for over six months. For some reason, the topic of student loans came up in the conversation.

I was initially surprised to learn that he had paid off almost half of his student loans debt within a year of graduation. I was shocked given that he has been unemployed for so long and we pretty much took the same amount of student loans.

As the conversation went on, I realized that my mistake was in the way I handled my student loans payments.

Today, I want to share with you five tips that I have been followed to help pay off my student loans faster. Follow these tips, then you’ll be surprised how fast you will pay off your student loans.

Without wasting any more time, let’s get right to it.

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5 Hot Tips To Pay Off Your Student Loans Faster

Tip #1. Try to Pay more than the minimum payment.

Whatever you do, make sure to pay at least the minimum monthly payment on your student loans.  This will do two things: you will avoid any late payment fees on your loans and you will avoid being defaulted on your student loans.

But paying only the minimum monthly payment is not going to be enough if you want to pay off your student loans faster. Paying more is one of the most effective ways to reduce your student debt.

Four years ago when I started paying my student loans, I tried all tactics in the book trying to pay the government the lowest amount of money possible, thinking that in 20 years my student loans will be forgiven.

But what I had failed to realize was that I was racking up interest after interest. And my principal had kept getting bigger and bigger.

It only makes sense. If you only make the minimum payment, it will take longer to pay off your student loan debt. And you will pay over several thousands in interest.

Student loan prepayment calculators can show you how much money you can save by paying your student loans faster each month by paying more than the monthly minimum.

2. Make an extra student loan payment

In addition to making more than the monthly minimum payment, make an extra student loan payment to reduce interests. Consider making an extra payment once every two months.

You see, the government wants its money back, so it will not penalize you for making extra payment. Another way to make extra student loan payments is by using your bonus.

If you receive a bonus at work by the end of the year, put some or a big a chunk of it toward your student loans. Some of your tax refund should also go toward your student loan.

Won the lottery? Then some of that money should also go toward your student loan debt.

When you make those extra payments, make sure you call your loan provider and tell them you want those extra payments to go to your principal only to limit the amount of accruing interests.

This is important, because if you don’t specify where those extra payments should go, then they would go to your monthly payments which will take into account your accruing interests.

3. Consolidate and refinance your student loans

Another strategy to pay off your student loans faster is to refinance your student loans. What student loan refinance will do is lower your student loan interest rates, meaning that more of your monthly payments go towards your student loans.

When you refinance your student loans, you exchange your federal or private loans for a new single student loan with a lower interest rate.

An easy way to refinance your student loan is through Lendkey. It allows you to browse several private student loan lenders that offer low interest loans. The interest rates are substantially lower than federal student loans and in school private student loans.

Of course to qualify you for the new loan, lenders will look at your employment, credit history, etc…

Click here to use LendKey to find the right loan for you.

4. Start paying the principal before you graduate

If you’re reading this tip, then it means that you really want to pay off your student loans faster.

One of the best strategies to pay off your student loans faster is to pay the principal (not the interests) as early as possible.

It’s even better if you’re still in school. In graduate school, I did not know that I could start making payments on my student loans before I graduated.

Don’t wait until you graduate or after you 6th month grace period to start paying your  student loans. If you wait, you will accumulate more interests and your principal will get bigger.

But if you start paying your student loans while still in school, those payments will go straight to the principal. And that will lower the amount of interest you’ll have to pay over time.

5. Apply for loan forgiveness

Depending on the type of job you do, you may be qualified to apply for loan forgiveness. You might be an eligible candidate if you work in the public service sector or work as a teacher.

The two main federal student loan forgiveness programs are the public service loan forgiveness and teacher student loan forgiveness.

There are also states that offer loan repayment assistance. Check your individual state to see if you qualify.

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