How to Pay Off Student Loans Fast
October 01, 2012 :: Admissionado Team
If you just graduated with a degree in business, economics, engineering, or law, chances are you’ll be employed soon after graduation… like, immediately. So, repaying your student loans may not be a huge concern to you. But even if you do get your dream job right out of school, you may need a little extra help in the beginning to get started paying off those loans you took out to pay for school. Here are some tips on paying off that debt quickly and effectively:
Do you really need that new car/bike/XBox/purse/chaise lounge/sound system right now? Do you REALLY need to go to the bar three nights a week or can you and your friends get a bottle of wine and hang out in someone’s living room? Do you really need to spend $35 on dinner or can you learn how to cook a few simple, tasty recipes at home? Do you have to get the deluxe cable package or can you live without HBO for six months? Expenses that seem like no big deal have a way of building up. If you can cut back on a few purchases a week, you can start to save up more money to start paying back those loans faster.
Get all your papers in order, and assess what you need to pay and when it needs to be paid. You may have more than one debt to pay off, so make sure to keep track of everything early on.
Set up automatic payments with your bank or loan companies. The credit bureau will see your payment behavior and this will have a good impact on your long-term credit rating (in case you ever need another loan for a house, a car, etc).
Pay Before Interest Starts
Every school’s loan program is a little different, but in general there is a grace period after the student graduates before the loan starts building interest. Obviously, once interest starts to accrue, your payments get larger. If you’re able to save up and work a bit through college so you can start paying off the loans before the grace period is over, you’ll be in much better shape.
Refinance Your Loan
If you can’t pay, don’t just sit there. Call up your loan company and talk to them. Some loan companies are more flexible as long as you notify them, and may be able to set up an extension. Just don’t wait until the last minute.