Student loan debt can take several years to pay off, especially for the average borrower who has approximately $26,000 in debt. It’s not unusual for college graduates to carry that student debt well into their 40s. It can be financially draining to have this much debt hanging over your head for so many years, but paying it off sooner can help you to save money and get rid of that extra financial burden. If you’re hoping to pay off student loan debt faster, the following tips can help:
Different types of student loans have their own terms and conditions, but most will usually give students a grace period after they graduate (or drop below full-time) before they need to begin making payments. If you have the financial means to do so, however, begin paying back your student loans as soon as possible. If you’re still in college and you have a job, begin paying back those student loans before you even graduate and you can really get a jumpstart. Whether it’s a few months or a few years—starting sooner will allow you to pay them off faster.
Pay more often, or make larger payments
Minimum payments are fine and will keep you from defaulting, but this alone won’t help pay off the debt any faster. You can significantly cut down the life of your student loans by making larger payments, or by paying biweekly, as opposed to monthly. Even if this isn’t something you can commit to every time a payment is due, making larger or more frequent payments here and there will add up over the years.
Find out if you’re eligible for tax deductions
You may be eligible to deduct a portion of your student loan interest when you file your taxes; eligibility is usually based on income. If you haven’t already, work with an accountant the next time tax season rolls around and find out if you qualify for any tax deductions. If you are eligible and you receive a tax refund, you can use that extra money towards your student loan balance. Doing this for every year that you’re eligible can help to shorten the life of your student loans and pay off the debt faster.
Ask about lowering your interest rate
A lower interest rate can help to lower your payments and/or shorten the length of your loan, especially if you use that extra savings to pay off more of your debt. Ask your lender if there are ways to lower your interest rate—for example, some lenders offer lower interest rates for borrowers who enroll in automatic payments.
Look into loan consolidation options
If you took out more than one student loan, you may benefit from consolidating them into one loan. Be sure to carefully explore your options before making any decisions. You’ll want to make sure that your larger, consolidated loan doesn’t come with a higher interest rate. Otherwise, you’ll be paying more in the end.
Contact Peachtree Financial Solutions
If you’re receiving long-term structured settlement payments, you may be able to turn those future payments into a lump sum of cash. Receiving your money sooner and in one lump sum can make it easier to pay down (or completely eliminate) large amounts of debt, such as student loan debt. If you want to try and get rid of your debt once and for all, and you’re receiving structured settlement payments, contact us today. We’d be happy to go over your options with you and provide you with a completely free quote.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.