Education is just a stepping stone to success and doesn’t guarantee you a job upon graduation. Most young adults are expected to get a job and start building their own family after graduating from college.
Paying off your student loans are part of providing for yourself, which seems to be a significant responsibility. The statistics gathered on student debt revealed that seven out of ten graduates still owe student loan debt, with an average debt of a little over $25000.
If you need a way to settle your student loan borrowers, then you should find the fastest way to do that. Paying off your loans faster will help in boosting your savings account as you now have more to save.
You want to free yourself from the bondage from paying off your student loan, then follow these eight technique’s, and attain your financial freedom.
1. Pay more than the minimum you owe
When you pay more than the minimum, and you put out the extra cash towards reducing your principal balance, then you are on your way to becoming debt free.
You can allocate the automatic monthly payments for more than the minimum, so you can be sure to pay a little extra. You can also remit any extra money you earn, such as the end of the year bonus and use it to service your loan.
2. You need to Refinance Your Student Loans
Refinancing your loan involves you a new loan with a lower interest rate. If you can keep the same or you probably increase them, but you were able to reduce your interest rate, then you will pay less interest in the long term. When you do this, a larger chunk of your payments will be used in servicing your student loan refinancing
3. Make your Payments Biweekly
Rather than paying your loan monthly as at when your payments are due, you can divide your payments into two and pay it every two weeks
What this trick does is that it helps you to pay off your student loans faster than you expected, because you will make over 26 payments in a year, which translates to 13 months.
4. Service your high-interest loans first
A professional tax adviser will advise you to pay off your expensive loans with higher interest, so you can be able to save more on your investment.
When you set aside some extra cash to pay your highest interest loans, it helps you to pay up the loans faster. What this means is that you pay your highest interest loans first, so you can get over with them and come back to the lower interest loans.
5. Try all you can so you Can to Avoid Extended Repayment Terms
There is a room for extended time to pay off your federal student loan. This can be very helpful in reducing your monthly payments and help keep you afloat during financial turbulence.
It is always advisable to stay off extended plans if you want to pay up your student loans faster.
Note: you will be requested to pay more interest when you are already stretched out on your repayment period.
6. Make good use of tax deductions
A good number of students borrowers are allowed to take a tax deduction of up to $2500 yearly for the student loan interest. The Adjusted Gross Income (AGI) is reduced when you take the student loan interest tax deduction because it reduces the interest you pay.
7. You can Decide to Enrol in the Military
The GI Bill or any other forms of relief, such as the military student loan forgiveness, can help you pay off your loans once you enroll in the military.
What this simply means is that you will have to commit some certain number of years as active military personnel to get help with your debt.
You can ask for advice from a tax preparer or tax accountant nearest to you.
8. Create a Budget
You should be meticulous and prudent as to how you spend your money. You should budget more extra funds towards paying your student loans, to eliminate your debts faster.
You need to create a budget; then you can track your spending. You should draw a table for your wants and needs, and always remember to go for the necessities first, so you can have extra funds to pay your loans faster. Do this and see your student loans disappear in no time.
CONTINENTAL TAX AND ACCOUNTING SERVICES