Paying off Student Loans

Jackson Silveira |

College can be a great experience and set you up for future success, but it also tends to come at a steep price. Most students who graduate from college leave with some form of debt, normally in the form of student loans. While student loans can be intimidating, it is possible to pay them off and do so in a timely manner. Here are some tips that can help you get ahead of your student loan payments:

  • Start saving while you’re still in school. This can be hard to do especially if you are not working a job while in school, but it can be done. Many times, students take loans that are more than they actually need, and they end up spending the money that they didn't use on classes or housing. If the extra money that you aren’t using is saved instead of spent, you will have money available to make payments on your loans once you graduate.
  • Make extra payments to the principal. The principal of a loan is the amount you agreed to pay back when you took out the loan. If you can afford to make extra payments to the principal, you can greatly reduce the time it will take you to pay off your full debt as well as reduce the amount of interest you pay over the life of the loan.
  • Have a strict budget. Having a strict budget, whether it’s while you’re in school or after you are done, can make a huge difference for you. The money you can save by writing out a budget and sticking to it can help you make extra payments on your loan so that you can pay it off faster. If you want more information about how to budget your money better check out our blog post here.
  • Refinance your loans. While this might not be possible for everyone, if you have multiple loans, refinancing them can be a great option. Instead of having multiple loans, you can refinance them into a single private loan. This typically allows you to get a lower interest rate thus reducing what you pay over the long term. 
  • Pay more than your minimum payment. It may be convenient to just make the minimum payment on your loan every month, but you won’t be doing yourself any favors. If you only pay the minimum amount, your loan will take longer to pay and the interest on it will continue to stack up and you will end up paying more.

College is hard, but paying off student loans can be even harder if you are not smart with your money and payment plans. Saving money, having a strict budget, paying off your principal, refinancing your loan, and making payments higher than your monthly minimum can help pay off your loan faster and at a lower cost to you.