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Worried About Your Student Loans? Here’s How You Can Repay Them


One thing that keeps students about to graduate happy and jittery at the same time, is the realization that another big task looms in-front of them, paying off their student loans.  People go to college for their future, to get a job that pays well.  College students look forward to that day they get their first paycheck (not coming from a part time job), and spend most of it celebrating the event.  However, the part that’s definitely not fun is taking out a portion from that very first paycheck to allocate and keep aside for debt payment.

When the second paycheck arrives, these newly graduated workers want to ask screaming, “When will this end?!”  But it can actually end faster than they realize, with the right technique of debt payment.  Here are some tips we have gathered to help you be debt free in a much shorter time.

Pay your Balance, Not Just the Principal Amount

On your loan payment bill, you are offered to pay off the loan by just the minimum payment.  It looks enticing, because it means you will deduct a minimal amount from your monthly paycheck.  But do you realize that this is not a wise financial move when you think long-term?  The longer you pay a minimum payment, the longer you take to pay off your student loan.  Not to mention the interest on the principal amount that remains will accrue.  When the principal amount of your debt is big, it will also have a huge interest fee.  So if you can allot more money to pay more of your debt than the minimum amount, do it, you will thank yourself later on for the smart move, once you have paid off your student loan earlier than expected.

Make Extra Payments

Explaining this is easy-peasy, you pay more when your student loan payment is due and soon your student debt will end.  It’s sacrificing for a while early on in your career, and enjoying all of your post- loan repayment paycheck money.

When your loan payment date arrives, make sure to pay at least the amount due (more is better, as specified), and never miss a payment.  Every 3 or 4 months or so, you can make an extra payment, instead of making 12 payments every year.  Just make sure that you inform your lender of your plans to make extra payments before you do it, so that it will be properly documented.

Consider a Lump Sum Payment

Whenever you receive extra money aside from your salary; a tax refund, overtime remuneration, a bonus for a job well done, or your 13th month pay, before you go splurging it on other things you can postpone for a while, divert it instead towards your student loan repayment.  Paying a lump sum means your principal loan amount will diminish, thus lowering your monthly interest as well.  This way, you can also shorten the period of your loan payment.

Consider Refinancing

Another strategy that can work to lower the rate that you pay for your student loan is to have it refinanced.  Refinancing means you will pay off your existing student loan by finding a different student loan lender, specifically a private one.  This way your new loan from the private lender will have a low interest rate. The process includes application and the lender checking your credit score and other requirements.  To be able to take full advantage of this opportunity, do not apply to just one lender; instead submit applications to several lenders.

Loan Forgiveness

Have you hear about student loan forgiveness?  This is a federal program that you can try to qualify for.   The program is open to people who acquired federal student loans with a federal repayment plan.  The qualifier will be deemed eligible if they are employed full-time, particularly in a job that’s in a qualified state, who holds a non-profit job, or has a federal or local public service job.

However there is a downside to applying for loan forgiveness, all the needed requirements should be met, and if your full term of work is required to be completed to receive forgiveness, you need to follow this.

Imagine Yourself with No Student Loan

The number one motivation you can have to be able to make a student loan repayment strategy work is by imagining yourself without a student loan.  Think of the one thing you cannot do or splurge on because you need to allocate money for your student loan payment.  It can be something expensive you want to buy – a new car, a designer dress, or a vacation you so badly want to take.  Imagine yourself fulfilling this because you have completed your student loan payment, and you can achieve your goal in no time.


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