Furthering your education is no easy feat, and paying off the student debt you’ve accumulated can be even more challenging. Not only can paying off your student loans cause a strain on your budget, but it can also prevent you from meeting your financial goals. Whether it’s making extra payments or refinancing, here are some ways to help pay off your student loans faster.
Student loan forgiveness
If you have an adjusted gross income of less than $125,000 or $250,000 for combined household income in 2020 or 2021, you’re likely eligible for student loan forgiveness. Student debt borrowers can have up to $10,000 of federal loans forgiven. Details are still in development, but applications should be available by early October with the deadline for submission by December 31.
Pay more than the minimum
Paying more than the minimum each month not only helps you pay off your loans faster and avoid further interest, but also gives a boost to your credit score. First, you’ll want to determine how much you can afford to add to your monthly bill and use a student loan calculator to see how it will impact you. Every lender’s website handles payments differently, so be sure to ask if your extra payments were applied correctly.
If you have extra income but want to space out your payments, consider making biweekly payments instead. There are no penalties for making additional payments, and it can help keep you ahead of your repayment plan.
Consider a different repayment plan
Depending on your income and loan amount, you can choose a repayment plan that works best for you. The government automatically puts federal student loans on a 10-year repayment schedule, but federal loans also offer income-driven plans that can extend your payments to 20 or even 25 years. FSA’s loan simulator can show you how your payments would change with each plan.
Look into refinancing options
If your lender won’t adjust your repayment timeline or you have a high-interest rate, you may need to consider refinancing with a new lender. At First Financial, we offer personal and consolidation loans that can help reduce monthly expenses and save money with lower interest rates.* Do keep in mind that refinancing with a new lender means you’d lose the perks of federal loans like income-driven repayment plans and loan forgiveness programs.
Want to change up how you pay your student loans, but don’t know where to start? The team at First Financial can give you recommendations based on your financial situation. Contact us to get started, or stop by your local branch to speak with a representative today!
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*APR = Annual Percentage Rate. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. Personal Loan repayment terms range from 12 to 60 months, and APRs range from 10.24% APR to 18% APR. Minimum loan amount is $500. Loan payment example: A $2,000 Personal Loan financed at 10.24% APR for 24 months, would have a monthly payment amount of $92.51. A First Financial Federal Credit Union membership is required to obtain a Personal Loan or Line of Credit, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan.