Are you struggling to pay off your student loan debt? If so, you’re not alone.
Student loan debt has now surpassed credit card debt and auto loan debt and is second only to mortgage debt. 44 million borrowers in the U.S. owe an average of $37,172 in student loans.
Even if you land a good job right out of college, making those monthly loan repayments can be tough. The average student loan payment of $242 per month can place a severe financial burden on young adults.
If this sounds like you, don’t despair. We’re revealing five ways to finally get your student debts paid off once and for all!
How to Finally Get Out of Student Loan Debt
1. Calculate What You Still Owe
Most of us signed off on student loan paperwork when we were teenagers. At that point, we really didn’t have the clearest picture of what those loans were – or how difficult they would be to repay.
Find out exactly how much you still owe, and to whom. Even if you’ve defaulted on some of those loans, taking steps to catch up will improve your credit rating.
Some banks and loan organizations may offer tips on how to reduce your overall debt.
2. Lower Your Interest Rate
If you have several loans with high interest rates, consolidating them could save you serious cash.
Refinancing involves combining many different payments into one, often with a lower interest rate. This will simplify your life by giving you only one monthly payment to keep track of.
A lower interest rate may not sound like it matters much. But considering it takes years or even decades to pay off student loan debt, even a small reduction can save you thousands!
3. Consolidate Your Federal Loans
Before you sign up for private refinancing, check to see if you qualify for a direct consolidation loan.
Offered through the Department of Education, this loan works much the same as the process outlined above.
The benefit of this type of loan is you can create an income-based repayment plan. This could significantly lower your monthly payments.
4. Make (and Stick to) a Stricter Budget
It could be that you’re having difficulty paying off your student loans because you’re spending too much money elsewhere.
Everyone’s situation is unique, of course. You may have already cut back as much as you realistically can.
Even so, it wouldn’t hurt to sit down and take a look at your monthly budget. By finding small ways to save money, you could put more of your income towards paying off those student loans.
5. Keep Chipping Away at the Debt
Even the smallest steps can make a big difference over time. If you haven’t already, consider signing up with a credit union or other type of membership rewards program. You could also open an account that rounds up purchases to the nearest dollar, and puts the extra pennies towards your debt.
Consider enrolling in an income-driven repayment plan. Finally, you could download apps that help you save on everyday expenses like groceries and gas.
Whatever you do, don’t give up! With enough time and effort, you can succeed in paying off your student loan debt.