3 Easy Tricks to Pay Off Your Student Loan Faster

January 21, 2023 FinTech and Alternative Finance, Fintech International, Fintech Services, Payments, Transfers, Rewards, Personal Finance No comments

Guest Post | Jan 21, 2023

It’s a rare student who doesn’t want to pay off their student loan faster. And in today’s post, we’re going to share three tricks that will help you do so without a huge surplus of cash.

#1 Pay More than the Minimum Due

An average student’s life is more than hectic. Urgent assignments, extra-curriculars, seminars, workshops, and lectures don’t leave young learners enough time to earn some extra money. But college students are an amazingly resilient, resourceful, and adaptable category that can make it in combining studies and work. If you avail yourself of a reliable essay maker for students, chances are you’ll also find some time for a part-time job, which will help you pay more than your minimum due.

Your student loan officer will tell you how much you owe each month. And lots of people just pay exactly what they are told. But did you know that paying even a little bit more than your minimum due can seriously reduce the time that it takes for you to pay off your student loans? This is because the extra money can get applied directly to the principal balance of your debt instead of your interest. So, if you start paying just 10 dollars more than your minimum monthly payment, chances are you will be able to actually shave up to an entire year off of your repayment period.

Unfortunately, there’s a twist to this trick. Sometimes, loan officers can get a bit sneaky and apply that extra money you gave them to future payments instead of to the chunk of debt that you’re trying to pay off. You do need to consult with your student loan servicer directly and prescriptively tell them that you want the extra money applied to the principal balance of your debt.

#2 Bi-Weekly Payment

A slightly trickier but highly effective strategy would be making bi-weekly payments.

If you get paid on a bi-weekly schedule, you know that there might be a couple months out of the year you get those sweet-sweet three paychecks in a month. It’s because there are 52 weeks in a year, which actually ends up shaking out to 26 bi-weekly pay periods. You could apply the same principle to your student loan debt and actually squeeze out an extra monthly payment without having to pay more. Here is how it works.

A fictional Sarah owes $400 a month in her student loan payments. Typically, she pays that $400 on the last day of every month. But instead, Sarah decides to split that in two and pays $200 on the 15^th and another $200 on the last day of the month. Because she’s paying bi-weekly, Sarah actually ends up paying an extra $400. So, she’s making 13 payments instead of 12 monthly payments. Just be sure that you’re paying both parts of your bi-weekly payment before your monthly bill is due. Otherwise, you can end up being delinquent on your student loan. There is on flaw, though. Not all services allow borrowers to do bi-weekly payments. So, call your servicer directly and clarify this issue.

#3 Pay Now or During Your Grace Period

Funding school - 3 Easy Tricks to Pay Off Your Student Loan Faster

For those who are still in college or recently graduated, start making payments now or during your grace period. There is no rule that says you have to wait until your loan servicer sends you the first bill in order to start making payments. Chipping away at your student loan debt early before you’re required to start making payments is a great way to reduce both the amount you owe and overall interest you’re going to pay.

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Paying even just a little bit every month is really going to help yourself out post-graduation. And just because you start making payments early doesn’t mean you have to keep going. You can always switch back until you’re required to pay your bills after the deferment of your loan while in school or during your grace period.

These are just three simple tricks, which, nonetheless, can help alleviate your financial burden and get out of debt sooner.

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