If you’re one of the 45 million U.S. adults carrying student loan debt, you probably want to find a way to pay off your loans as soon as possible. While there aren’t any magic solutions to make debt disappear, there are certainly things consumers can do to help themselves. Here are some smart ways to deal with student debt.
Start Paying as Early as Possible
For some federal student loans, such as Subsidized Direct Loans for undergraduates, interest doesn’t start accruing until after graduation. This gives you an opportunity to get a head start on paying off your loans before interest starts kicking in. If you’re able to do any amount of part-time work during school, or put money aside in any way, it can be wise to use that to pay down the amount you owe on your student loans.
Once interest payments begin, more of what you’re paying will start going toward money you never really borrowed in the first place. When you can pay down your principal ahead of time—even just by a little bit—it can help you significantly down the line.
Find the Best Student Loan Refinance Deal
You’ve probably seen the term refinancing many times throughout your life. It’s a financial tool that allows borrowers to get better rates on their loans. So, what is refinancing a student loan? Not much more than taking out a new loan to replace your current one.
This can be a great idea for borrower because it allows for them to get a loan that better reflects their current financial need. If you want to lower your monthly payment, refinancing to a lower interest rate or longer term loan can both help you. But how to does one find the best deals on a student loan refinance?
Juno is a company that helps consumers find the optimal loan for them in less time and with minimal effort. It works because Juno collects bids from a huge group of potential lending partners. They select the best options out of this pool, and only offer these to their members. This is a free service to use. So long as you meet the basic requirements for refinancing, you’ll be able to refinance your student loans.
Look for Potential Forgiveness Opportunities
Those who have loans through the federal government might qualify for certain student loan loan forgiveness or income-driven repayment options. Your eligibility for these perks will depend on the type of loans held by the borrower. This is actually one of the few arguments against refinancing your student loans. If your loans have these advantageous federal benefits, it’s often a better choice to hold onto them instead of refinancing, as you will probably lose those additional privileges when refinancing with a private lender.
Utilize Tax Deductions
Possible assistance from the federal government doesn’t end with low interest rates and benefits on certain student loans. Many borrowers will also be able to claim a deduction on their taxes based on the interest paid over the previous year on certain loans. This allows for borrowers to deduct a maximum of $2,500 depending on their income. Taking advantage of this program can help those paying off student loans save a substantial amount of money.
Work Somewhere That Helps Pay Your Loans
Finally, if you really want to supercharge your student loan repayment, consider working for a company that will help you in the process. Some employers offer their employees perks such as assistance with paying off student loans. There are also companies that will offer to pay for a part of your college tuition—whether its undergraduate or graduate education. Finding the right workplace that has these programs in place can make a huge difference in allowing you to pay off your loans sooner.
No matter how much you have in student loans, it’s always a better feeling to not have debt hanging over your head. Utilizing some of these smart strategies for paying off student debt can help you pay down what you owe in less time.