Paying Off Student Loan Early

Paying Off Student Loan Early

Paying off student loans early is a great way to save money, but it’s not always easy to do. After all, you’ve got other expenses to pay and bills to pay on top of your student loan payments. The good news is that there are plenty of ways to make extra payments in order to get rid of your student loans faster. Here are six tips for paying off student loans early:

Pay off the loan with the highest interest rate first.

There are a few ways to pay off your student loans. The first is the most obvious, but also the best: pay off the loan with the highest interest rate first.

The second method is to prioritize paying off the loans with lower balances before those with higher balances. Why? Because you’ll save money by making smaller payments in promotional periods and on low-interest debt, rather than waiting until you can afford larger payments on high-interest debt (like credit cards). This method might be more practical if you’re unemployed or underemployed after graduating college and need to put more money towards other bills as well as your student loans.

It really depends on how much cash flow you have each month – if there’s enough left over after all of your other expenses (rent, food), then it makes sense to focus on lower-interest debts first so that they don’t snowball into something unmanageable down the road!

Pay more than the minimum payment each month.

The first thing you need to do is pay more than the minimum payment each month. This will help reduce the length of time it takes to pay off your loan, and will also save you interest over time.

For example, if you have a $10,000 student loan with a 5% APR on it, and make monthly payments for 10 years at $100 per month (the minimum), your total repayment cost would be $11,923.93 in principal and interest combined! Yes – that’s over $1k MORE than what you actually owed at the end of those ten years!

Make biweekly payments to pay off student loans faster.

If you’re making monthly payments, you can make biweekly payments more convenient by setting up automatic withdrawal. | It’s easy!

  • Log in to your lender’s website or give them a call
  • Ask about setting up automatic payment withdrawals from your checking account every other week (if this isn’t an option for you, ask if there are any other ways to set up automatic payments).
  • Make sure that your lender will allow this; some lenders require biweekly payments in order to waive fees or interest rates on student loans

Refinance your student loans.

Refinance your student loans.

Refinancing leverages the power of the marketplace to get you a better deal on your student loans. You can refinance both federal and private student loans, but there are some important differences between them that you should be aware of before deciding which route to take.

The primary benefit of refinancing is that it provides access to lower interest rates and monthly payments; however, if you want to lower your debt (and save money) in other ways like paying down principal or increasing payments, refinancing might not be right for you.

Take advantage of student loan benefits and discounts

A few things to keep in mind:

  • The benefits and discounts vary by lender. Many student loan lenders offer benefits for their borrowers, but the terms and conditions vary widely. It’s a good idea to review all of your options before signing up for any special programs.
  • Some discounts are based on where you work or go to school. If you work for a large employer or attend an expensive private university, there may be more opportunities available than if you work at a small company or attend community college.
  • Discounts aren’t free money—they require some sort of commitment from you, such as working at the same job for three years after graduation or attending an institution that meets certain requirements (like being accredited).

You can pay off student loans quickly by making extra payments.

You can pay off student loans quickly by making extra payments.

Pay more than the minimum payment

Paying extra towards your student loans will help you get rid of them faster and save you money in the long run. Paying a little more each month reduces the amount of interest you pay, which can add up to thousands of dollars over time.

Pay off the loan with the highest interest rate first

If several years have passed since graduating, it’s likely that there are several types and amounts of debt on your plate – including student loans, medical bills, credit card debt, car payments and mortgages. While planning out a strategy for paying down each type is important (see below), it’s best to start by focusing on those with the highest interest rates first: that way you’ll get rid of those pesky debts sooner rather than later!

Pay biweekly payments to pay off student loans faster

Paying off your student loans early is not impossible, and there are plenty of ways to do it. Making a few extra payments each year can be the difference between paying off your loan in 20 years or 10 years. If you have more than one loan, prioritize paying off the one with the highest interest rate first so that you can save money on interest over time. Remember that there are also many financial benefits available for those who pay their loans on time—including discounts on certain services and products.

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