Paying off your student loans faster will not only remove a psychological weight from your shoulders, but it’ll also save you thousands of dollars in annual interest payments. If you’re finding it difficult to boost your repayments, read on for our top three tips to pay off your student loans faster.
1. Set Up an Automatic Payment Schedule
Setting up an automatic repayment system is one of the first things you should do after taking out your student loans. In most cases, you’ll need to go through your loan servicer to set up an automatic repayment schedule. If you’re lucky, your loan servicer may even issue an interest discount when you sign up for their service. Remember, as your income grows, you should slowly increase your monthly automatic repayment amount.
2. Use Cash Windfalls to Make Extra Payments
When you receive an unexpected sum of money (e.g. an inheritance or end of year bonus) it’s always tempting to put it towards a new holiday or flashy purchase. However, by spending a cash windfall, you’re actually missing a great opportunity to pay down a big chunk of your student loan or accelerate your repayment schedule.
3. Refinance Your Student Loan Debt
If you have a good credit score and hold steady employment, you may be eligible to refinance your student loans. Refinancing is a debt management technique that involves taking out a new loan to consolidate existing debt. The main benefit of refinancing your student loan debt is that you’ll be able to establish a shorter term length or lower interest rate.