It’s 2019. It’s the Year of the Pig. And it’s time to get greedy. The country has a student loan crisis, so chances are you or someone you know is working to back their debt. But, we’re here to help with five simple tips on ways to pay off your loans faster.
1. Contribute more than your monthly minimum
Now is a great time to kick your caffeine addiction. Or start buying generic and cooking more meals at home. Then, take that extra money you are saving each month and start paying more than your repayment minimum. A contribution of just $100 extra each month can help the average borrower get out of debt years faster and save thousands on accruing interest.
2. Make extra payments
It might not be feasible to save enough money each month to make extra payments. But, consider saving over longer periods of time and making extra payments every three to six months. While this will do less than monthly contributions to save on interest, any extra money you can put towards paying back your student loans will make a difference.
Make sure to contact your lender and let them know you want to apply the extra payments directly to the loan principal. Otherwise, your loan servicer will hold the money and put it towards your next payment, allowing interest to still accrue.
3. Make a lump-sum payment
Maybe your annual bonus just came through. Or a distant uncle left you a nice chunk of cash. Or you hit on 100 to 1 odds that Tom Brady’s first pass in the Super Bowl would be an interception. Whatever it may be, if you find yourself with some unexpected money in your pocket, you may be tempted to splurge on something flashy and new that will provide instant gratification. Putting this sum towards your principal, however, will help you pay down your loans faster without really deducting anything from your current budget or cash flow. And, ultimately, it will greatly improve your finances and improve your quality of life.
4. Ask your employer to add student loan repayment to your benefits packages
We’ve already given you some tips on how to do it, but consider asking your employer to offer student loan repayment. It’s not very expensive to administer on the employer’s end, but it can make a huge impact on recruiting and retention. For the employee, it can be a gamechanger. By the same logic as Tip #1, extra monthly contributions from employers can help employees save money and get out of debt more quickly.
5. Join a company already offering student loan repayment benefits
If your employer rejects your request, or if you’re already between jobs, consider finding a new employer that offers student loan repayment. The positive impact on your personal finances is clear. But, employers that are offering the benefit are also showing clear dedication to their employees. A healthy work environment is key to work-life balance and general happiness.