5 Stress-Free Ways to Lower Your Student Loan Debt

Image Source: Pixabay

Student debt is one of the most significant financial burdens young adults face today. American students owe over $38,792 in student loans, and the average monthly payment is nearly $400. For many people, the thought of dealing with this debt can be overwhelming.

With the rising cost of college, more and more students are taking out loans to pay for their education. If you’re one of them, you’re probably looking for ways to lower your student loan debt. 

Here are some stress-free ways to do just that:

1. Refinance Your Student Loan Debt to Lower Interest Payments

If you have student loans with high-interest rates, you may be able to save money by refinancing them. When you refinance your student loan with SoFi, you take out a new loan to pay off your existing student loans. This allows you to get a lower interest rate, saving you money over time. Many companies offer student loan refinancing, so shop for the best deal.

Before you refinance your student loans, you must know what interest rates you’re currently paying. You can find this information on your monthly student loan statement. The weighted average interest rate (WAIR) is the average of all your interest rates, weighted by the amount you owe on each loan.

2. Pay Off Your Student Loans Early

If you can afford to do so, paying off your student loans early can save you a lot of interest payments. To do this, simply make extra payments on your loans each month. You can also make bi-weekly or weekly payments instead of monthly payments. This will help you pay off your loans faster and save money in the long run.

You can also make lump-sum payments on your loans when you have extra money. For example, if you get a bonus at work or find a way to cut your household bills so you can save more each month, you can put that extra money toward your student loan debt.

3. Get Help From Your Employer

Some employers offer student loan repayment assistance as a benefit to their employees. If your employer offers this benefit, you can have a portion of your student loan debt repaid up to a certain amount each year. This can help you pay off your debt faster and save money on interest payments.

However, not all employers offer this benefit, so check with your HR department to see if it’s available.

4. Use Student Loan Forgiveness Programs

Sometimes, you may be able to get your student loans forgiven if you work in specific public service jobs. For example, the Student Loan Forgiveness Program works to ensure that your remaining balance on your federal student loans after you make a minimum of 120 qualifying monthly payments.

To qualify for this program, you must have a Direct Loan from the Department of Education. You also must be employed full-time by a government organization, a nonprofit organization, or a private organization that provides public service.

5. Enrol in Autopay

Automating your minimum student loan payments can help you stay on track with your repayment and avoid late fees. When you enroll in autopay, your loan servicer will automatically deduct your monthly payment from your bank account. This can help you make timely payments and avoid missed or late payments.

Automating your payments also allows you to choose the day of the month that works best for you. For example, if you get paid on the first of the month, you can have your payment automatically deducted on that day. This can help you stay on track with your budget and avoid spending money that you should use to repay your student loans.

There are several ways to save money on student loan payments. Be sure to shop around for the best interest rates, make extra payments when possible, and consider enrolling in autopay to help you stay on track with your repayment.

 

*This is a collaborative post.