Student loans can be a huge pain. To make matters worse, the more you ignore it, the more money you will end up paying in fees and interests.
However, there is something you can do about it.
Tips for Paying Down Your Student Loans
Know How Much You Owe
This is the first step to clearing the debt. Many people sign off on this loans when they are young and a little naïve. So it is okay if you have no idea where to start.
Visit Credit Sesame’s website to see the amount you owe and institutions you owe to. In addition to showing your balance on both federal and private loans, they will offer a few tips that you can use to reduce the debt.
Lower the Interest Rate
This method may work very well for some people.
Refinance the student loans to pay them sooner. There are services that can help you with this, such as LendKey. It quickly shows you low-interest loans from community banks and credit unions.
Smaller community banks have loan terms that are borrower-friendly, unlike the big national bank chains. You will enjoy more flexibility and lower interest rates.
Set Aside Savings to Pay Off the Student Loans
The point here is to owe less than you owe right now.
You can do this using Stash. It is an app that will help you invest and grow your money which you can, in turn, use to pay off your debt. It simplifies things for you. All you need to do is select the portfolios that align with your goals, interests and beliefs then turn on Auto-Stash.
Join an Income-Driven Repayment Plan
With a plan like this you may not consolidate your loan but they can, at least, help you avoid deferment or default. This way, you will make steady progress towards paying for your loan.
The loans are in four varieties:
- Pay As You Earn (PAYE Plan)
- Income-Based Repayment Plan (IBR Plan)
- Income-Contingent Repayment Plan (ICR Plan)
- Revised Pay As You Earn (REPAYE Plan)
Reduce Your Expenses
You will have a hard time paying off your student loans if you spend too much money elsewhere. Everyone has a unique financial situation but you should check your budget once again.
A Side Hustle Can Help
If there is nothing you can cut from your expenses, then maybe you need more money. Start with little things like using apps. If time is not a problem, you can resell thrift items such as clothes.
Another thing you can do is list any extra room you have on Airbnb.
If All Else Fails, Declare Bankruptcy
This is not a common strategy and is a difficult one. However, it can be a great option when you are desperate. You are eligible if:
You cannot maintain a minimum living standard.
Your situation is likely to remain the same.
You have tried to repay the debt in a good faith effort.