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Jun 23

Student Loan Payoff – Tips To Getting There

If you have student loans, you may be like millions of other graduates who are struggling to make their payments. Understanding your options for repaying your loans is important as is not completely ignoring them, hoping they will magically disappear. If you want your journey through student loan debt repayment to be a successful one, there are several things you need to consider.

Staying organized with any kind of financial debt is vital to understanding as well as paying off what you owe. Students who utilize financial aid to finance their education often times have more than one loan and lender. Student loans can be funded by the federal government or any private lenders. It can get confusing when you are trying to keep track of what you owe and to whom. It’s essential that you understand what kinds of loans you hold, who you hold them with, and of course- the amount of each loan. Go through your statements, call your lenders, and utilize the National Student Loan Data System to get information.

Consider paying off the loans with the highest interest first. You won’t be charged a fee to pay off your loans early. If you focus on paying off the high interest loans first, you will save a lot of money over the life of the loan. Paying more than the minimum payment each month will make a significant dent in your balance and will save you in interest. Whatever you do, don’t stop paying on your other loans because you want to put all of your money towards the loan with the highest balance. This is not an option and will only cause you to default on the loan you don’t pay on.

Be sure to update yourself on new developments in the student loan industry. Why? Because new programs are being implemented all the time to help loan holders restructure their payments in order to make it easier for them to take care of their debt. The Fed has created consolidation programs based on borrowers’ income level and ability to pay. You may also have the option to put your loans into deferment (interest ceases to accrue) or forbearance (interest still continues to accrue) depending on your particular financial situation. There are also options for public service workers to apply for loan forgiveness. It pays to do your homework and make sure you know all of your options.

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