5 min read
The says it all. In today’s world where college tuition continues to rise each year, many students end up taking out student loans just to attend school. Not only does the cost of attending school increase, but if you decide not to go back to school after graduating, you could find yourself facing thousands of dollars in debt. While some people choose to pay off their loan early, others have no choice but to keep paying off their debts until they graduate. If you’re currently in school, here are some ways to pay off your student loans faster!
1 – Make Extra Payments
One of the best things you can do to reduce the amount of time it takes you to pay off your student loan is to make extra payments. Many companies offer student loan payment plans that let you spread out your payments over a period of years instead of making numerous lump sum payments throughout the day. You should always check with your lender before signing any agreements, but these programs may allow you to pay less interest than paying off your loan in one big chunk.
2 – Consolidate Your Loan
Another great option to consider is consolidating your loans. By combining your existing loans into one manageable monthly payment, you will save money and cut down on the number of times you need to write checks. Before doing this though, talk to your lender about whether or not a consolidation program would still lower your interest rate. Sometimes lenders require that borrowers consolidate their loans regardless of what type of plan the borrower chooses.
3 – Use A Home Equity Line Of Credit
If you have access to home equity, then you might want to use that to help pay off your loan. This is a great way to get cash out without having to get a second mortgage on your house. Before using your home equity line of credit, however, make sure it’s approved. Also, make sure you don’t exceed the limit set on your credit card or line of credit so you don’t end up getting charged fees.
4 – Consider Public Service Jobs
Paying off your student loans isn’t always fun, especially when you’re staring down $50-$100 bills at the end of the month. But if you work full-time while you’re in school, you’ll probably earn enough to make ends meet. Just remember, it’s never a bad idea to start looking for public service jobs soon after graduation, even if you aren’t ready to leave the workforce right away. Most states have job boards you can search online, and you could find opportunities at places like government offices, libraries, fire stations, etc.
Graduate Plus Student Loans
How do I find out how much money I need to borrow?
Visit the website to view what types of loans are offered at different loan amounts. Remember that the total amount borrowed should not exceed 20% of your annual income (not including scholarships). Be sure to add any additional costs that are necessary to complete your degree program such as books, tuition fees, housing, meals, transportation, etc., before calculating how much money you’ll need to borrow.
The Graduated School Loans site provides information about federal student aid programs that may help pay for college expenses. You can apply for Stafford, PLUS, Perkins loans; and work-study/internship opportunities. Also, if you’re interested in applying for private loans, check out our post below!
What factors influence the interest rate on my loan?
Interest rates depend on many factors and can change depending on your credit history, number of payments over the course of the loan term, type of loans you have, and interest rates charged by lenders. The average undergraduate borrower would expect to receive a loan with a fixed interest rate of approximately 4%. A graduate student who takes advantage of a subsidized loan option might be able to get a lower interest rate if they qualify for a special subsidy. Find out more about subsidized versus unsubsidized loans here!
Is student debt good or bad? And is it possible to repay it?
Many people enjoy the freedom and privilege of being able to go to school without having to worry about paying off their student loans. However, if you don’t plan ahead, it’s likely that your loan balance will continue to increase each year. If you start repaying your loan early, you could reduce the size of the principal balance and save yourself thousands in interest charges. Repayment plans vary according to your situation. Check out for repayment options.
Graduate Plus Student Loans
Federal Stafford Loans
Federal student loans require repayment over 10 years, and have fixed interest rates throughout the loan period. These loans do not need to be paid back until after graduation, making them very attractive to many students. However, they generally carry higher interest rates than private student loans. In addition, these loans cannot be transferred between people.
Direct Subsidized Loans
Direct subsidized loans are government-backed loans that are offered at low interest rates based on financial need. A borrower does not need to meet any specific eligibility requirements to receive a direct subsidized loan; however, their interest rate may be lower than federal loan options. Direct subsidizes loans are offered to graduate school students in certain fields and should only be considered if the borrower’s income exceeds 120% of the FPL (free and reduced price lunch program).
Direct Unsubsidized Loans
Direct unsubsidized loans are the same as direct subsidized loans, except that they offer higher interest rates. Borrowers who do not qualify for direct subsidized loans are eligible for direct unsubsidized loans.
Private Loan Options
Private loans are non-government backed and must be repaid directly with money earned after graduation. Most lenders charge variable interest rates, and borrowers must meet minimum credit score requirements. Private loans are often referred to as bank loans, and the application process requires approval from a lender prior to being accepted.
Other Student Loan Funding Options
There are a number of other funding options available to graduate students. These options include employer-sponsored plans, parent or spouse loans, and retirement accounts.
Graduate Plus Student Loans
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