Hey, congratulations! You’ve finished up your degree! So, you’re done, right?
Oh wait, remember those loans that you took at the beginning of school? Well, it’s now time to pay them back.
Yikes, that seems daunting, doesn’t it? At present, there are 42.9 million Americans with federal student loan debt.
Now you don’t feel so alone, do you? Don’t worry; paying off student loans is not as hard as it seems. Let’s take a look at some ways for getting out of debt.
Make a Plan and Save for Paying Off Student Loans
It seems like such a simple idea, but start off your road to getting rid of your student loan debt by making a savings plan. Create a budget and cut down on unnecessary expenses. Wait for items to go on sale and look for coupons and cheaper store-brand products.
Reevaluate Your Repayment Plan
Federal loans are automatically placed on a 10-year repayment timeline. Alternatively, income-driven repayment plans cap payments to a portion of your discretionary income.
One type of such plan is an income-based repayment plan. A calculator like https://www.studentloanplanner.com/income-based-repayment-calculator/ will help determine what your student loan payments will be on this plan.
Ask Your Company for Help
Some companies offer student loan perks. These companies will pay off your student loan debt for you while you work for them. Employer-matching contributing systems can help you get rid of your student loan debt faster.
If you’re not able to change jobs, then ask your boss for a raise. Increasing your income will give you more money to pay off your loans.
Get a Side Hustle
Another way that a lot of people are increasing their incomes is by picking up side hustles. Here are some examples of side hustles:
- Charge scooters
- Sell cosmetics
- Livestream your gameplay, music, or art
- Hire yourself out for tasks
- Become a driver
- Deliver groceries
Refinancing may result in lower interest rates or reduced monthly payments. Before you refinance though, make sure that it’s worth it. Some lenders may have fees for refinancing. Be sure to calculate your savings and compare them to any applicable fees.
Apply for Loan Forgiveness
Some graduates qualify for loan forgiveness from the federal government. Some of those that qualify are
- teachers in low-income districts
- government or non-profit employees
- military personnel
Make Extra Payments
If you can afford it, making larger payments or more frequent payments can help you to shed your student loan debt faster. This will cut down on the amount of time it takes you to pay off your debt. It will also reduce the amount of interest that you’ll need to pay on your loan.
Enroll in Autopay
Federal student loan servicers offer a discount just for enrolling in autopay. This is usually a quarter-point interest rate discount. All you have to do is let them automatically deduct payments from your bank account! This also helps you to ensure you don’t miss any payments and end up with a late payment fee.
Utilize Tax Deductions
Interest paid on student loans can be deducted up to $2500 depending on your adjusted gross income. This will help you save money on your income taxes, which frees up extra money to pay down your loans.
How Long Should Repayment Take?
Paying off student loans typically takes between 10 and 30 years. This timeframe can vary by individuals. Making any of the adjustments recommended here can help you take control of your personal finances. If you found these tips helpful, check out any of our other blogs under Financial Growth!