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Tips for Paying Back Student Loans
Is the burden of college loans weighing you or a family member down? Here are a few tips to get out from under this debt:
Make more than the minimum payment
You should already have payments set up, so anything extra, even $20 a month, is a start. If you’re making pre-payments while in school, call your loan servicer to make sure all payments are going to the principal rather than the interest.
Consolidate and refinance
The goal of refinancing is to decrease your interest rate so more of your money goes toward paying down your loans. When you refinance your student loans, you can get one consolidated loan with one monthly payment, but you will probably want to include only those loans in which you can decrease your interest rate. A few words of caution: If you refinance a federal loan with a private loan, you might be giving up some protections, such as being able to apply for deferment or an income-based repayment plan in the event your finances take a hit in the future.
Utilize your raises
Consider taking half of your raise amount and put it toward student loan payments.
Trim your budget
Many who succeed at this say the key is seeing it as short-term, focusing on the free feeling you’ll experience once this weight is off your shoulders. A few options are:
• Canceling cable TV
• Not going to restaurants
• Ordering club soda & lime instead of wine, etc., when socializing
• Working extra hours or taking a second job
You’re limited only by your creativity and motivation. Every bit benefits your student loan repayment.
