Most people who take out student loans, whether they graduate or not, end up with so much debt that it takes fifteen to twenty years to repay the money. One way that you can pay off the debt faster is make more frequent payments and pay larger amounts each month.
Use A Student Loan Calculator
A student loan calculator will show you how much money and time it will take to pay off your loans. You can play around with them and see what happens if you adjust variables such as payment amount and frequency. When you start paying more often, you’ll pay less in interest. By increasing your payment amounts, you’ll also see your loan balance drop drastically. Check to see just how much money you can save by making half of a payment every two weeks, which means that you made 13, not 12, payments a year.
Pay More Frequently
Now that you know how much you can save by making a half payment every two weeks, adjust your budget accordingly. Try to have the money automatically drafted from your checking account so that the payment gets made without you having to do a thing. If your income fluctuates, tuck cash away during the good months so that you can continue to meet your financial obligations during the leaner times.
Add A Little Extra to Your Payments
When you make halfapayment twice a month, see if you can add a little extra; try rounding up to the next ten dollars. So if you owe $124, just pay $130. While it may not seem like a whole lot, over the course of a year, that’s a whole extra half payment that you make, in addition to the extra whole payment you get by making halfapayment every two weeks. If you’ve got the time and energy, pick up a part-time job and use that money to knock out your student loan even faster.
Even if you can’t take on extra work or squeeze a few more dollars from your paycheck, simply use a student loan calculator to see how much you should send in twice a month in order to pay off your loans sooner. Just by switching around your payment plan, you can save money painlessly and effortlessly–good news for anyone who’s already on a tight budget.