A college education is valuable, but it’s not cheap — and that’s where student loans come in. Without student loans, which can come from both government and private lenders, it could be difficult to keep up with tuition. But it’s important to try to minimize debt and save money. Students need to utilize budgeting tools and learn how to pay off student loans faster.
Roughly 44.7 million Americans saddled with student loan debt, according to the Federal Reserve. The average graduate has about $35,397 in federal student loan debt, according to the Department of Education. Most of the debt is federal loans with private loans making up just a small portion.
Although federal loans are more popular, some find value in choosing private student loans over federal loans. If you’re interested in private student loans, consider using Credible’s free online tools to browse private lenders and compare rates.
If your goal is to pay off your loan early, there are at least five options to consider.
How to pay off student loans ASAP
- Set up autopay: Believe it or not, just adjusting how you pay your student loans can have an impact. If you use autopay, which allows the lender to automatically deduct the amount owed each month from your bank account, you can be rewarded with a reduced interest rate. That amount is often around .25% which can add up and allow more cash to go toward paying down the principal balance. An added bonus is that you’ll never have to worry about accumulating fees because of a missed payment.
- Make bi-weekly half-payments: While most people typically pay once a month, adjusting your student loan payment to twice a month amounts to one extra payment a year. That payment can go a long way in helping to reduce your principal balance much sooner. Just cut your monthly payment in half and make payments every two weeks. For instance, if you pay $500 a month, try paying $250 every two weeks instead. It’s a fairly effortless change that can help pay off that student loan faster and you wind up saving money on the interest. To lower monthly payments altogether, check out Credible to compare private lenders’ refinancing offers…Read more>>