First and foremost, congratulations! It has been six months since recent college graduates received their degrees. Graduating college is no easy feat, but you did it.
Here comes the other news, it is now time to start repaying those student loans. Student loans may seem overwhelming, but fear not, below is what you need to know about your loan.
Know Your Loans - It’s key you keep track of your lender, balance and repayment status for each of your student loans. These details determine your options for loan repayment and forgiveness. Check out Studentaid.gov if you are unsure of the details surrounding your loan.
Make More Than the Minimum Payments - One of the simplest, and best ways, to pay your student loans is to pay more than is required. However, that may be easier said than done. Try not to think of paying more as paying double or triple, instead increase your payments by $20 or $50 every month. Even a small increase to your minimum payment can go a long way to reaching a zero balance as quickly as possible.
Consolidate Your Loans – A consolidated loan combines multiple loans into one loan for a single monthly payment, and one fixed interest rate. Research the pros and cons of student loan consolidation, and see if it’s right for you. It’s important to know if your loans are federal loans or private loans. If you consolidate federal loans into a private student loan, you might lose some repayment options and benefits. These benefits include deferments for unemployment and loan forgiveness programs that are only available with federal loans.
Research Loan Forgiveness – If you have federal student loans and are employed by a government agency or a nonprofit organization, you may qualify for Pursue Public Service Loan Forgiveness (PSLF). If your employer offers this service, you should consider applying for the program, as you can earn forgiveness in as little as 10 years.
During Tax Season - Once tax season rolls around, don’t forget to deduct your student loan interest. You can reduce your taxable income by up to $2,500 on any interest you’ve paid for that tax year. Your lender should send you this information, but you can also request it or get it online. It may not make a huge difference, but every little bit helps.
With the proper planning, paying off your student loans is a manageable feat. To pay off student loans quicker, you may need to make sacrifices, work part-time, or stick to a budget. This can help you get out of debt faster and avoid paying interest for years.
Paying off your student loans quickly is crucial for your future financial stability.