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Thursday, February 27, 2014

Useful tips on how to pay off student loans

Student loan debt payoff tips
Student loan debt often takes decades to pay off
You’ve graduated at the top of your class and now you’re ready to start your new life in the glittery world of grownups. But before you transition from student to professional, you suddenly realize you have student loan debt to repay—and lots of it (lots!). 

As you scour your monthly statements, flipping from page to page wondering if the numbers are right, you are shocked to realize that you owe tens of thousands of dollars in student loan debt. And even more horrified when it slowly sinks in that you (and only you) are on the hook for the debt. 

For the next twenty or thirty years, you will be required to make student loan payments to a ubiquitous lender that you know only by the statements you receive in the mail each month—a daunting prospect, in deed.

If you’re like most graduates, you don’t know exactly how to pay off student loans. Do you try scrimping and saving, cutting back expenses on a month-to-month basis, in the hopes that you will eventually “pull-through?” Do you enroll in graduate school to buy yourself some extra time (as you pick up a lot more debt along the way)? Or, do you search for useful tips on how to pay off student loans quickly? Let’s see what your options are.

How to pay off student loans

You have a number of repayment options when it comes to paying off your student loan debt. The first option is to reduce your interest rate, if possible, by refinancing your loan at a lower fixed interest rate—because federal student loans have lower interest rates (compared to private loans), it may not be necessary to refinance them with a private lender. To do this you will need to contact lenders and inquire about their refinancing options.

Generally speaking, you always want to have the lowest rate possible for your student loans. But this can only happen if you are an informed borrower—and even savvier negotiator (if you, in deed, opt to refinance your student loans at a better rate). Lastly, you can also pay above your monthly payment amount, which may require cutting costs in other areas to free up cash. By putting more of your income toward paying down your student loans, you can lessen the term of the loan; thereby paying off the debt quicker and saving more money in the long term.

Additional information on how to pay off student loans

Learning how to pay off student loans is easy, but determining the best approach for your financial needs may be slightly challenging. As with any financial decision, you need to do the legwork. That means contacting lenders with questions, improving your credit score to increase your bargaining power with lenders, and committing to any budget that will ensure prompt payment of your student loans each month. For more useful tips on how to pay off student loans, visit www.CommonBond.co. This website provides information to students and graduates seeking to learn more about student loan refinancing and consolidation options.

Image license: Images Money; CC BY-SA 2.0