One of the best investments you will ever make is your college education. This investment can quickly become one of your most expensive. Many student loan programs are designed to allow you to have ten years or more to pay off your student loans. Of course, you end up paying a good deal of interest over the years. There are steps you can take to pay off your student loans sooner.
Instructions
1. Do not use deferment or forbearance options. There are circumstances under which you can suspend your loan payments for a specific period of time. This might seem like a good option, however, you are only pushing off your due date.
2. Continue to make payments on interest if you do need to take a deferment or forbearance on your student loans. For some types of student loans, when you opt to have your interest payments deferred as well, the unpaid interest is added to your total balance when you do begin to pay back your loans.
3. Apply extra money each payment to the principal of your student loans in order to pay down the total balance sooner. Make certain you specify the amount of your payment that should be applied directly to the principle. Otherwise, if you pay more than the amount due in any given amount, that dollar value will simply be applied to your next payment due.
4. Make extra payments as you are able. Consider using bonuses from work or income tax refunds to pay additional money to reduce the balance of your loan. Once again it is essential that you make a notation with this payment that it is to be applied to the principle of your loan.
5. Transfer your student loan balance to a low interest credit card or line of credit. Private student loan providers often have high or variable interest rates which makes it seemingly impossible to pay off your student loan in a reasonable amount of time. In some cases it makes more sense to transfer your balance to a low interest credit card or even to take out a loan at a smaller interest rate to pay off the student loan lender.
6. Start paying back your student loan before your graduate college. You can make payments on your loan while you are still attending college. Try to make small payments on your loans each month. If you needed loans to cover expenses one semester but find that you receive financial aid or scholarships in excess of your expenses, the next semester, apply some of that excess money to your student loan balance.
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