Six tips to pay off your student loan faster and save you $1,000
THE cost of college education is at an all time high.
This means that student debt is too.
Students have little or no choice but to continue borrowing money, which ends up accumulating more debt.
For the 2021-2022 academic year, tuition and fees increased to $10,740 for in-state students at public four-year colleges, according to the College Board.
Data from the report also showed that tuition and fees at private four-year institutions reached $38,070.
Despite the rise in student loans, there is some relief.
Some schools send aid to their students in the form of loan-free financial aid programs where those who apply will receive funding with no strings attached.
Yet millions of students are still feeling the weight of their crippling debt.
Below are six ways to save and pay off your student loans a little faster.
1. Have a plan
This tip may seem obvious, but can be easy to overlook.
It is important to keep a list of all student loans you have taken out.
Once you have your list, include the current balance, interest rate, scheduled repayment date, and repayment amount for each.
This will not only keep you organized and on track for success, but you can also refer to it when deciding on your purchases.
An easy way to check your loans is to go to StudentAid.gov.
Here you’ll find your recent statements, apply for other loans, and check on your plans.
2. Stick to a budget
Budgeting can be beneficial for anyone looking to save, especially students.
Many experts say helpful budgeting rules like the 50/30/20 budgeting rule are a sure way to save money.
The 50/30/20 numbers can be interchangeable depending on how much and how quickly you want to accumulate your money.
Usually, budgeters suggest dividing your money into three categories:
- 50% of income goes to the essentials
- 30% of income is dedicated to financial/savings goals
- 20% of income goes to non-essential expenses
3. Pay more than the minimum
If you can afford it, this trick can help you save money in the long run.
The faster you repay the principal of your loan, the less interest you incur.
Just make sure your extra payments are applied to principal and not accrued interest.
Before making an additional payment, first confirm with your loan provider to see if you have the option of making additional payments on principal only.
4. Set up automatic payments
Often, lenders will offer you a better interest rate if you choose to sign up for automatic payments.
Payment will be automatically taken from the account of your choice and the interest rate reduction can be up to 0.25% cheaper.
This can be beneficial for both you and the lender, as the lender has almost guaranteed payments and you can avoid late fees.
5. The 24 hour rule
The rule is simple, wait 24 hours before she buys something.
But what is simple in theory can be difficult to follow.
Waiting a day gives you time to process and weigh the pros and cons of a purchase, allowing you to feel good about your choice.
Plus, it also gives you time to shop around for a better deal.
It takes patience, but you’ll probably thank yourself.
Just note that this rule applies to buying anything non-essential like food, groceries or other basic necessities.
6. Side bustle
Side hustles are a great way to bring in some extra cash and can be anything from driving Uber to completing online surveys.
These can be as easy as it sounds and some can even be done from your couch.
Some quick and easy side activities include:
- On-site testing
- Audio Transcript
- Market research
- Walk the dog
- Baby sitting
The Sun reveals that thousands of Americans are expected to see their wages rise to at least $18 an hour as the legislation is passed.
Additionally, households can get refunds on student loan repayments.
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