In 2017, the New York Federal Reserve reported that more than 44.2 million Americans have student loan debt totaling $1.44 trillion. Whether you carry student loan debt, have a child entering college or are thinking about going back to school, it’s clear student loans are a major topic of concern. While paying off student loan debt is never easy. There are simple ways to streamline your repayment process, so you can pay off your debt sooner while saving money.
Refinance your student loans.
Just like auto or home loan refinancing, student loans with high-interest rates can be refinanced to secure a better rate — helping you cut down your monthly payments and leaving more cash in your pocket. If your goal is paying off debt as fast as possible, lowering your payments can also make it easier to pay more than the minimum payment. By doing so, you could slash your student loan balance in a fraction of the time.
One word of warning: consider excluding any federal loans you have from your refinancing. These loans often come with federal borrower protections, like income-driven repayment plans that you may need to use one day.
Set up automatic payments.
Automating your monthly student loan payment is likely the easiest action you can take to get on track and pay off your loans. Not only does this simple activation ensure you don’t miss any payments or incur any late fees, opting to use autopay also comes with one big bonus. Many lenders offer a 0.25 percentage rate reduction if you automate your monthly payments. While that may seem like a small figure, it can add up to a significant sum over time.
Make biweekly payments.
These days, we’re all about “hacks” and how we can simplify everything from getting ready in the morning to prepping food for the week. But did you know you can “hack” your student loan repayment, too. If you’re making one monthly payment on your student loan accounts, one way to do that is to switch to biweekly payments.
By paying half of your monthly payment every two weeks, you’ll end up making 26 half-payments. That equals 13 full payments each year. Without much thought or effort, you’ll make an additional payment each year toward your loan. On a 10-year repayment plan, you’ll pay off your loan at least nine months sooner by switching to biweekly payments.
Making payments on student loans can feel overwhelming, especially when you can’t see the light at the end of the tunnel yet. However, as illustrated above there are ways to make the process more manageable. Getting you out of student loan debt and on the path to financial freedom.