Now that graduation season is upon us, many grads are walking across the stage and receiving their college diploma, but many are wondering how they’re going to pay for it when they need to pay off student loans.
For those graduates fortunate enough to have lined up a great job, you may be riding high right now, but fast-forward a few months and student loans could quickly begin to dominate your financial concerns.
You are not alone.
Paying off student loans is no easy task, and it’s unlikely that you’ll be able to do it quickly, but there are some excellent ways to shorten your repayment period by months or even years! How? Try one or all of the methods below and you could end up saving thousands of dollars!
Make a plan
The first thing you’ll need to do is draft a budget, create a spending plan, and determine just how long it’s going to take to get your loans paid off.
If you’re not satisfied with the results, it may be time to start making cuts to your expenses. Lop a little money off the spending side, and you could start spending more on paying down that debt.
Stop going out with friends, don’t throw away any more money on grabbing the latest tech gadgets, cut your cable bill and don’t partake in any more shopping sprees.
Start Paying Immediately
If you qualify for a six month grace period, don’t wait until it expires to start making monthly payments.
You’ll end up owing less in interest if you start paying down the debt right now, and it’ll help you get into the routine of allocating enough funds toward your monthly payments, rather than spending them on unnecessary expenses.
If you’re disciplined up front, you’ll set up some positive habits and end up being far ahead of everybody else. If you’re still in school, any amount you can contribute to your student loans could end up helping greatly.
Schedule Multiple Payments Per Month
It’s common knowledge that you can pay your mortgage off more quickly by making two payments per month, but many people don’t realize that you can do a similar thing with student loans!
Making two payments per month will end up reducing the amount of total interest you accumulate, allowing you to get out of debt sooner, and at a lower cost.
Also, by making payments every two weeks, you’ll end up making more payments than you would have made on the monthly plan, since paying every other week equals 26 payments per year!
While that’ll cost you more money in the short-run, it’ll save you tremendous amounts over the lifetime of your loan.
If you can’t afford to make extra payments in full, then send in whatever you can manage to divert with each payment, as even an extra $5 or $25 per month will add up to some big savings over time.
Remember, every dollar you allocate toward your payments now could save you hundreds of dollars in interest fees over the course of the loan.
Make Sacrifices & Cuts
The more you can cut expenses, the sooner you’ll be out of debt.
Whether that means dropping your overly expensive cell phone plan, reducing the number of nights you go out each week, or skipping out on a big vacation, whatever you can do to drop your expenses will allow you to allocate more cash for those monthly payments.
Set a strict monthly budget for yourself, and don’t just stick to it, but aggressively cut any absolutely unnecessary monthly expenses. Figure out exactly where all of your money is going, then reduce the amount being spent on frivolous purchases so you can free up more cash for your loans.
If you’ve never set up a budget before, look for online advice about how to create one. Write it all down, or build a spreadsheet and make sure to keep it up to date. The more you watch your spending, the more costs you’ll cut and the sooner you can get out of debt.
Take Advantage of Discounts
Are you aware of all the ways you can reduce your debt?
Signing up for automatic monthly payments or consolidating your loans could earn you an interest rate reduction, saving you some serious money.
Most lenders will offer you an interest rate reduction of 0.25% just for enrolling in their autopay program, so get signed up now and you can start saving today!
Tackle High-Interest Loans First
Your high-interest rate loans are costing the most money, so you need to pay them off first.
Just like you’d do with credit card debt, you’ll want to focus on paying off your student loans that come with the highest interest rates, which will reduce the amount of money you end up having to pay over the life of your loans.
Getting rid of your high-interest rate loans first could save you thousands or even tens of thousands of dollars, so don’t neglect this essential, important tactic.
Any extra money that you can come up with each month should be directed toward the payment for your highest-interest loan.
Make Extra Income
Have you looked into taking on a second job? Looked for freelancing opportunities? Are you aware of all the weird ways to make additional money?
You might be surprised by how much money you can raise by taking on additional responsibilities, like filling out surveys, writing reviews or doing simple manual labor.
Ask the neighbors if they need help with chores, look for extra work on the outsourcing websites like Odesk or eLance, and be sure to watch for opportunities on your local Craigslist job board too.
Consolidate Student Loans
Student loan debt consolidation is convenient and free of charge for federal loan holders; however it’s not always in your best interest to consolidate.
Any time that you can consolidate private loans to get a lower interest rate, that’s probably worth pursuing, but be cautious with your federal loans.
Some federal student loans come with amazing financial benefits, and consolidating them with a direct consolidation loan could wipe out your eligibility to take advantage of them.
Be careful too, because even though a consolidation might reduce your monthly payments, it typically also ends up making your loan more expensive over the long-haul, since it stretches out your monthly payments to last for more years, giving interest more time to accumulate.
Student Loan Forgiveness Programs
Public service workers and government employees, educators and nurses are sometimes eligible for student loan forgiveness programs.
The U.S. Department of Education Federal Student Aid website provides a comprehensive listing of the most common discharge, cancellation and forgiveness programs.
Be sure to look into these benefits, as some of them could dramatically reduce your expenses, saving you thousands to even tens of thousands of dollars.
Car Capital Financial
Following one or all of these strategies will help put you on the fast track to paying off your student loan debt and saving you thousands of dollars in interest accumulation!
Before you sign up for dangerous neighborhood loans or credit card cash advances, be sure to look into the affordable car title loans offered by Car Capital Financial.
Car Capital offers secured personal loans in the form of car and other vehicle title loans. Loans do not require a credit check, and cash can be delivered in as little as 30 minutes. Title loans are issued based on the borrower’s ability to repay the loan.
Car Capital Financial has provided safe, reliable and affordable car title loans to residents of Southern California for over 15 years, and can get you the money you want today. If you need money quickly, then please call 1-888-500-9887 now.