Student loans are a form of stress for many young Americans. Fortunately, President Joe Biden announced in August that specific federal student loan borrowers would be eligible for some forgiveness. This arrangement means students can pay less than expected for their overall debt.
Aside from student loan forgiveness, individuals should still practice due diligence to pay their debt fast. Here are ways to pay off student loans:
1. Check out loan forgiveness programs.
Aside from the latest forgiveness program, the U.S. Department of Education offers other forgiveness, cancellation, and loan discharge. These programs vary by state, career path, and even particular circumstances like disability. To check your eligibility, research your state and forgiveness program online.
2. Pay more than the minimum.
One way to quickly pay off student loans is to go above the minimum each month. You can check an online student loan calculator to determine your time frame and amount.
However, check how your loan servicer handles your additional payments. Some lenders may put your extra cash towards interest, while others charge it to your next month’s payment. Contact your lender if you want your additional payment applied to your current month’s payment.
3. Make biweekly payments.
Many often opt for a monthly payment to save money; however, if you want to make extra payments, consider biweekly payments.
For this step, divide your monthly student loan payment in half. Follow this by paying the amount every two weeks. This half-payment ends up making a total of twenty-six payments. This arrangement makes thirteen annual payments instead of just twelve. When you make thirteen payments, you could save on interest costs and pay ahead of schedule.
4. Look for refinancing options.
Refinancing student loans refers to finding a new lender that offers lower interest rate terms. While lower interest rates mean fewer payments, individuals may lose the benefits from federal loans once they refinance.
Effectively paying off student loans can save time and energy. Additionally, taking advantage of student loan forgiveness can make your payment scheme smoother. Contact a financial advisor for the best options available.