After US President Biden announced the cancellation of $1 billion worth of student loan debt, student loan debt relief has become a major topic not just in the United States, but around the world.
Unfortunately, not everyone will be included in the program. Bu, there are other more feasible ways to deal with student loan debt, not to mention dealing with student loans is much easier than before, especially with programs like student loan repayment plans.
If that's your ultimate goal, then there's no time to lose. Here are some of the things you can do to eliminate or, at least, make it easier for you to pay off your student loan debt:
Believe it or not, paying more than the minimum monthly payment can go a long way when dealing with your student loan debt, and here's why.
If you have a debt of $40,000.00 with an interest rate of 5% due in 10 years, that will yield a total interest of $10,911.45 by the end of the repayment term. But, that's assuming that you pay the minimum amount each month, which is around $424.26.
However, if you pay a bit more than the amount due per month, that will chip away at the $40,000 principal debt's potential interest. For instance, if you pay $500.00 per month instead, the interest will go down to $8,757.32.
Simply put, paying more than the amount due per month can potentially reduce student loans and may also allow you to pay off all the debt in less than ten years.
Take note that when loan providers notice this change, they may automatically credit that extra amount to the next payment, so you need to give them a heads up.
If you ever get extra money from any source, be it from tax refunds or a raise, you'd be better off putting all that extra money into your loan debt. Don’t get a new smartphone or a new television set.
You've been paying the minimum of your loan debt for several years now, and you've survived until now, which means there's no need to improve your quality of life with unnecessary purchases, at least, not now.
One factor that pushed you to take out a student loan is perhaps because you thought you'd be forgiven later on, but that's not how it works.
At the very least, you need to work as a public service officer for ten years to even get a chance at student loan forgiveness. If that's not a job you want, then it's a lot better to earn money to pay off your debt doing a job you like.
Besides, certain companies offer several perks to their employees, including student loan debt payments, so you don't have to get a public service job to enjoy special programs. In fact, you don't need a job at all.
Up until now, you probably have no idea what loans you took as part of your student loan debt. Remember, student loan debts are not just one big loan. It consists of numerous loans with varying interest rates, such as federal loans, private loans, and others.
Your goal is to find out more about these loans. If you're lucky, one of your loans may have some sort of special repayment plan or deferment program, which can be extremely helpful when dealing with student loan debts.
It's also worth listing the interest rates of your loans. That way, you can prioritize loans with the highest interest rates before they grow into massive amounts.
You might be thinking, why should you put some extra effort into dealing with your student loan instead of just paying the minimum and doing it the way everyone does?
Unbeknownst to many, there are certain perks to paying off your student loan debt early:
Whether you like it or not, your student loan debt will affect you as long as it exists, so the best-case scenario is to eliminate this debt as soon as possible, but that's not going to happen if you remain financially reckless. This guide, however, should get you started on your way to eliminating your student loan debt.