Student loan debt is one of the biggest burdens we can have on our budgets. There are some ways available for you to minimize this burden and lower your student loan interest and debt. Below are 5 ways that I have found to successfully lower your student loan interest and lower your student loan debt.
1. SIGN UP FOR AUTO PAY
Almost all lenders give an interest rate deduction for enrolling in auto-pay (direct debit) and paying your bill every month. This is a really easy way to save yourself some money just for paying your bills on time (something we all want to be doing!). Additionally, many lenders will increase the savings after making several years of on time direct debit payments.
2. REFINANCE OFTEN
Paying attention to interest rates is important for many reasons, including refinancing your student loans. When interest rates drop, refinance your loans and see a savings in your payments. Only private student loan companies offer refinancing, however, Federal student loans allow you to consolidate multiple federal direct student loans into a single direct consolidation loan with a potentially lower interest rate.
3. RESEARCH LOAN FORGIVENESS OPTIONS
There are tons of profession specific and location specific student loan forgiveness programs available right now! You just have to do your research. I am a public interest attorney and I participate in the public interest attorney loan forgiveness program which pays a percentage of my student loan debt! There are even jobs that will pay a portion of your loan interest or debt as an employment incentive. If you have a lot of debt from tutition, you may want to consider jobs or a profession that include these incentives!
4. USE GRACE PERIOD TO PAY
All lenders give you a grace period after you graduate before you must begin repaying your loan. Use this time to start making payments and get ahead of the loan now. This will save you interest and money in the long run and you will get in the habit of putting aside the payments each month.
5. ACCELERATE PAYMENT ON HIGHER INTEREST LOANS
If you have different loans with different interest rates, make sure to accelerate payment of the highest interest rate loan. This will save you a ton of money in the long run. There are no penalties for pre-paying or paying twice a month, so do what you can to make more payments on the high interest loans.
These tips will help you alleviate some of the burden that student loan interest and debt put on your budget. Try at least one today and you will see the savings start to add up. The most important thing is to do your research and stay on top of your debt.