With the average college graduate leaving school with approximately $26,000 in student loan debt, it is no wonder that it takes so many years to finally pay it all off. A tremendous amount of debt to pay back can be a burden for anyone, but it can be particularly stressful for young adults who are just beginning to establish themselves. Because minimum payments can be somewhat low for the most part, those who only make these minimum payments usually take about 20 years to pay off the debt completely. If paying off student loan debt well into your 40’s doesn’t exactly sound like a viable option, read on for tips on paying it back much sooner than that.
Start as soon as possible
Depending on your specific loan terms, you may have a grace period of up to six months after graduating or dropping below full-time student status before you need to begin loan payments. But just because you’re given this option doesn’t mean you need to take advantage of it—you can get a head start on paying back your student loans now, even if you’re still in school. The sooner you begin, the sooner you can get out of debt.
See if you can lower your interest rate
Your lender may offer ways for you to lower your interest rate. For example, you may receive a reduction in interest if you set up automatic payments. A decent credit score is also a good bargaining chip if you’re trying to talk your lender into lowering your interest rate. Find out what they can offer you—it doesn’t hurt to ask, and even just a small reduction in your rate will make a big difference over the years.
Consider loan consolidation
If you have multiple loans, you may be better off consolidating them into one loan. However, make sure that the singe loan doesn’t have a higher interest rate than the smaller loans you’re consolidating, or it will just cost you more in the end.
Make larger or more frequent payments (or both)
Paying the minimum payment just once a month is fine, but it won’t help you get rid of your debt any faster. Consider making larger payments or even making them more frequently, such as biweekly instead of monthly. If you can even do both of these things, you cut down the life of your loan considerably. You’ll also save a lot in interest fees by doing this.
See if you qualify for tax deductions
Based on your income, you may be able to deduct some of your student loan interest the next time you file taxes. Ask a tax professional in your area for details. If you really want to accelerate the payoff process, consider putting any tax refund you get towards your student loan bills.
Contact Peachtree Financial Solutions
Are you the recipient of a structured settlement insurance payment stream? Why not sell some or all of your future payments and receive your money now in the form of a lump sum? By receiving it all now, instead of waiting for it to trickle in on a periodic basis, it can be much easier for you to catch up on bills and debt. You may even be able to completely eliminate your student loan debt! At Peachtree Financial Solutions, we help people just like you sell their structured settlement insurance payment streams, whether in portions or entirely. For more information on receiving cash now for the sale of your future structured settlement payments, contact Peachtree Financial Solutions today.
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.