The cost of college has skyrocketed in the U.S. over the last few decades.
Meanwhile, the total amount of student loan debt in the country currently stands at a staggering $1.75 trillion.
The average borrower has $28,950 in student loan debt and some of this is for majors that lead to jobs that don’t pay that much.
If you are like most people, you probably want to pay off your student loans as fast as you can. Here are six strategies that can help you get rid of your debt burden in the shortest timeframe possible.
Make additional payments
One of the best ways to reduce your principal balance is to make additional payments every month. It does not necessarily have to be a large amount — even an additional $50 a month can go a long way in reducing your overall student loan debt burden.
Make lump sum payments whenever you can
Whenever you find yourself with extra cash, make sure you put it towards your student loans.
Whether it is a check for your birthday from your parents, grandparents, or relatives, a bonus at work, a tax refund, or anything else, use it to make lump sum payments as and when you can, so that reduce your principal balance faster.
Make use of employer repayment assistance program
Many employers these days offer student loan repayment assistance programs to help their employees pay off their student loans faster.
Under the program, employers pay a certain amount of money – anywhere from $50 to $200 per month or even more – towards their employees’ student loans.
If you are currently employed, ask your employer if they offer such a program. If they do, make full use of it.
In case you are looking for a job, ask potential employers whether they are willing to offer this perk as part of your benefits package.
Take advantage of interest rate discounts
Many private lenders these days offer interest rate discounts of up to 0.50% for those who enroll in an automatic payment plan.
Also, many lenders offer interest rate discounts to those who make their payments on time, those who have a checking account with the same bank, and those who graduate within the stipulated time frame.
Ask your lender whether they offer any such discounts and find out whether you meet the required criteria. If you do, your lender might reduce your interest rate, which in turn can help you pay off your loans faster.
Refinance your student loans
If you have had a steady-paying job for a few years and have a good credit score, refinancing your student loans might be a good idea.
Make sure you get quotes from multiple lenders, compare their terms and conditions, and go for the one with the lowest interest rate.
Live on a budget
The best way to pay off your student loans fast is to live on a budget.
Cut out or reduce all the unnecessary expenses from your monthly budget and learn to live frugally.
Whatever money you manage to save, put it towards your loans.