People take up student loans to supplement their college fees and complete their degrees successfully. Just like any other loan, education loans come with an interest rate and a repayment period. You do not want to carry the load of a student loan and this is why you must quickly pay off your education loan. Remember that the more amount you pay towards your loan, the lesser interest you will have to incur against the loan. Nothing is greater than the feeling of being debt-free.
The student loan can become a burden if you are not managing the repayments properly. Also while you carry the burden of the student loan on your shoulders, it becomes quite difficult to take up another loan for your needs. This is the reason why you must clear off your education loan as soon as possible.
Here are some of the major strategies using which you can quickly pay off your education loan and be stressfree.
Make the extra payments
Student loans come with the option of prepaying the facility. This option allows you to pay the amount which is more than the minimum amount payable. Make some extra payments every month along with the minimum payable amount and the student loan principal amount will reduce gradually.
Using this method, you can save a lot of money in the long run. Before you make the payment, make sure you let the services know about your payments.
Refinance your student loan
You have a good credit score and a stable job and the first thing you can do is refinance your student loan. Those extra payments you make can help you pay off the loans and you do not have to make any extra payments. Firstly, check your credit score. Secondly, If the score is above 600 and you have a fixed income, then go for the refinancing strategy.
Autopay can be beneficial
Heard of the autopay feature? Well, this feature is beneficial for the people who have taken an education loan. You cannot refinance your education loan at this point and the autopay facility is the perfect facility for you. The biggest benefit of using this autopay feature is that it can help lower your student loan interest feature.
The autopay facility allows the loan servicers to deduct the money directly from the bank account. With the drop in interest rate, you can save up some money in the process.
This may sound very sophisticated in the beginning but it is a rather very simple strategy. Biweekly payments are nothing but paying off half the payment every two weeks instead of paying one full payment at the end of the month.
This type of payment schedule can help you manage your monetary resources and save extra money. You can use a biweekly education loan payment calculator to check the time and the money that can be saved.
The capital interest
You start incurring an interest against the capital amount of the student loan as soon as the repayment period starts. Also, your interest starts capitalizing and your balance grows simultaneously. You pay higher interest on a larger principal amount. The motto is to pay off the accrued interest in your grace period. This will help you get rid of the extra amount you incurred previously.
You can make monthly interest payments and avoid capitalization. Also, you can make a total interest payment before the grace period, and in this way, you can quickly pay off your education loan.
Follow the started repayment scheme
Your education loan will follow a standard repayment plan unless you modify it. Remember that by following the standard repayment cycle, you can quickly pay off your education loan.
You can choose other repayment plans which can be extended for a longer period, but remember that the longer you extend, the more money you have to pay. You should stick to the standard repayment scheme and pay off your debts gradually.
Put in the bonus money
Use the extra money you get on several occasions and use that money to refinance your student loan. Many employers offer funds for your loan repayments in the name of employee benefit. You can start a side business and earn some extra money to quickly pay off your education loan. Remember the faster you pay off the debts, the more quickly you can be a free bird.