4 Ways to Pay off Student Debt Faster
Student Loans are a source of frustration for millions of graduates. Student debt reached an all-time high of $1.41 trillion dollars in 2019 with 54% of college students borrowing an average debt of more than $35,000. If you are dealing with student debt, EZ Money can help you pay off student debt faster.
Additional Monthly Payments
Making an additional payment each month can go a long way for debt relief. Let’s say you owe $35,000 with a 4.77% interest rate (the average for undergraduates in 2019) over a ten year period. Adding an extra $100 a month to your payment could shave 2 years and $3,000 or more off of loan terms.
Even with a tight budget if you can afford to make additional payments, you should consider it. When making an extra payment you do need to reference that you’d like it applied to the current month, not pushed to the next.
Bi-weekly payments are an increasingly popular way to approach student debt. Break up your monthly payment into one payment every two weeks. By the end of the year, it works out that you’ve made an extra payment, earned back some of the interest, and shaved time off of your term.
Do you have good credit and a steady job? If yes, refinancing your student loan is a great option. This means combining your federal loans or private loans into a new student loan with a lower interest rate. You can choose a shorter term loan which can increase your payment, but you’ll be able to reach the goal of reaching payoff considerably quicker.
Enroll in Automatic Payments
In some cases, lenders offer reduced interest rates on federal loans when you sign up for automatic monthly payments. Typically the reduction is a small .25%. In the grand scheme of the loan it might lead to a small amount saved but the benefit is that you’ll never miss another payment. Be sure and ask your lender about this simple direct deposit.
Many employers offer tuition assistance for post-graduate students, but some also offer debt assistance as well. Ask employers (current or potential) if debt consolidation is an added bonus for company employees.
Contact EZ Money to Get Debt Free
When student debt is overwhelming, EZ Money can help you gain control. For assistance and advice contact EZ Money today for an improved financial outlook tomorrow.