Eager to pay off your student loans but don’t know where to begin?
Whether you’ve just graduated college, or you’ve been trying to tackle this hurdle for over a decade, here are some possible game plans to pay off your lingering student loans.
- Refinance your student loans
The most time-efficient and cost-effective way to pay off student loans is to refinance your student loans. Student loan refinancing rates have dropped significantly and have become the lowest in recent history.
When you refinance student loans, you can refinance federal, private, or both student loans into a new student loan with a lower interest rate. By going through a private lender, you can save tens of thousands of dollars.
- Lump-Sum Payments
Speed up the process of paying off student loans by making extra lump-sum payments. If you are at the liberty to do so, inform your student loan servicer and apply the lump-sum payment to your principal balance to reduce the amount of interest you owe.
- Income-Driven Repayment Plan
Federal student loans (not private student loans) are eligible for PAYE, REPAYE, and IBR plans, which are offered by the federal government. Your monthly payment would be on a percentage of your discretionary income. Percentages may vary based on the plan you choose. You may have a lower monthly payment and student loan forgiveness
- Public Service Loan Forgiveness
This is a federal program created by Present George W. Bush that forgives federal student loans for individuals who are employed full-time in an eligible federal, state or local public service job, 501(c)(3) nonprofit job who make 120 on-time payments over 10 years.
- Consolidate your student loans
Consolidation allows you to combine your existing loans into one Direct Consolidation Loan, though it does not lower your interest rate or monthly payment. With the Direct Consolidation Loan, your interest rate will become a weighted average of your existing loans.