Pay Off Student Loans - 3 Tips For Quickly Paying Off Your Debt

Looking for ways to pay off student loans? After you complete college, you main focus is gaining adequate employment in your chosen field. But for far too many, the stress of paying off college debt is exhausting. Entry and mid-level positions often times simply do not pay enough to quickly pay down student loans; especially when you factor in the cost of living. Thankfully there are a few solutions to help you pay down your student loans.

One is the Income Based Repayment plan (IBR). What happens is government loan officers will look at your current income and come up with a repayment plan that you can afford. People with graduate degrees often have monthly payments of over $1000. With an IBR, that payment can drop down to $300. Another upside to the IBR is if you choose to work for the government, a non-profit organization or as a volunteer, after certain amount of years you may be eligible for loan forgiveness programs, where your loan amount and any interest accrued will be forgiven.

Another option is to apply for as many scholarships and grants as you can. This is money that you don't have to pay back. Also if you work, see if your employer offers any type of tuition assistance. Many companies do, especially if the field you are studying is relevant to your current position. If you don't work, get involved in a work-study program. These jobs are usually a part of your financial aid package and the work is conveniently located on campus. Whether you work on campus or through a private employer, try to save at least half of your income in a high-interest savings account. That money will really come in handy at the end of your college education and you can apply it to your student loans.

Then there is loan consolidation. Sometimes the method of consolidating college loans gets a bad rep. But the negativity comes from programs that charge a high interest rate to consolidate. An easy way around this is to do your research. Find the best student loan consolidation program, offered at the best rates. Get quotes and be sure to read all the fine print. The only bad thing with consolidation, is usually once you go this route, you will not be eligible for any type of loan forgiveness program.

Paying off student debt is a hassle. But if you research all the opportunities available to you, you may be able to pay off student loans sooner than you expect.

Tips On Paying Off Your Student Loan Consolidation

Student loans can be a long-term burden that can hang over your entire young adult life. Many students wonder about how they can pay back their student loans. If you have more than one student loan or are interested in loan consolidation, the following information may benefit you.

A consolidated student loan follows pretty much the same guidelines as a regular student loan. Your guidelines and payment schedule are provided by the lending institution. Your first payment is usually due 30 to 60 days after you're approved for consolidation of your student loans. You should continue to make your payments on your individual student loans until you receive acceptance or approval of your consolidation application.

Most institutions will provide you with a choice about how you want to pay back the consolidated student loan: standard payment plan, graduated payment plan, variable payment plan or extended payment plan. A standard payment plan involves a set monthly payment that does not change over the life of the loan. A graduated payment plan involves starting with low monthly payments and gradually increasing the payments until the loan is paid off. A variable payment plan will allow you to adjust the amount of your payments based on changes in your incomes and expenses. And finally, an extended payment plan gives you a longer period of time to pay off your loan, thus reducing the monthly payment.

Beware of consolidation lenders who charge a fee to consolidate your student loans and lenders who charge a fee for early repayment of the loan. There are plenty of lenders out there who are willing to consolidate your student loans without charging any fees. Don't sign any paperwork until you've verified that the lender has none of these fees hidden in the paperwork.

Finally, be aware that some lenders require a credit check before approving your consolidation application. This is standard procedure and nothing to worry about if you have a slightly below average or better credit rating. If your credit rating is on the low side, you should know that consolidating your student loan may improve your credit rating.

Paying Off Student Loans Is Essential

It is imperative that you pay off your student loans in time. This is because the government has been having difficulties dealing with the many defaulted loans over the past several years. As a result, they are getting more diligent in their efforts to have them paid.

If your student loans are not paid off, the government can seize your income tax refund or even garnish your income wages. In some extreme cases, the loaners can go so far as taking control of your property, in order to get the money owed them.

To help prevent these horrors from happening to you, you can pay a little bit of the loan even while you are still attending school. That will lessen the burden later.

You can also apply for grants while in school too. Grants don't have to be paid off. Or maybe do some part-time work to help pay the loan.

The biggest problem with any loan is the huge interest added on. Paying off some of the loan early will help to lessen that weight considerably.

One good strategy when paying off student loans while still in school, is to pay off the smallest loan amount first. If you have several loans, paying off the smallest one first will be better than paying them all a little at the same time. It means one fewer headache when you leave school.

Another good strategy is to pay off your non-subsidized loans first. Non-subsidized loans are those where you owe the interest, as opposed to subsidized where the government pays the interest. The interest is the biggest problem to pay in loans, more than the principle.

So combine the two strategies and pay off your lowest non-subsidized loans first. Then your lowest subsidized loans afterwards.

In addition to giving you less of a headache, paying your loan while still in school in increase your credit rating. Then by the time you leave school and get a great paying job, you could have a big chunk of your loans paid off, and have great credit. Then you can pay off the bigger loans with the bigger interest.

One final suggestion: never use Peter to pay Paul. That is, don't let money from one loan or a credit card pay off another loan or credit card. Take it from me, it doesn't work in the long run.

But do the best you can to pay off something from your student loan while still in school. You'll be happy you did.