How to Pay Back Student Loans With Simple Strategies

How to Pay Back Student Loans With Simple Strategies Make Extra Payments (Even Small Ones) If you have a job after you graduate, you should consider paying more each month than the minimum required by your loan servicer. This will reduce the interest you in the long-term and save you a significant amount of money. For example, a study by US News applied this math to a $50,000 loan with five percent interest and a 10-year plan. If you add an extra $20 to your minimum payment, you will save $1,000 in interest and pay off the loan five months earlier. If you add $100, you save $4,000 and pay the loan off two years earlier. Related Articles Student Loan Repayment Student Loan Repayment Student Loan Forgiveness Program Student Loan Forgiveness Program Is Consolidating Student Loans and Credit Cards a Good Idea? Is Consolidating Student Loans and Credit Cards a Good Idea? Use Innovate Apps to Set Aside Funds Think of the repayment process as a marathon, not a sprint. Like all smart runners who train with the best technology, you should use the latest that science has to offer as you run your race. Groundbreaking new apps such as Digit use brilliant algorithms and coordination with your bank accounts to transfer money and automatically set aside certain amounts of funds for paying off debt. It's a great way to set aside money for the extra payments mentioned above. Why It Works The app shelters the money in a way that's sensitive to your budget needs. It analyzes your income and spending and periodically sets aside a small amount of change into your Digit account, which you can use to repay your loans faster. It's amazing how shaving a few bucks off the top here and there can accumulate into a pile of cash. Set Up Automatic Withdrawals From Your Paycheck If you don't want to use a third-party app like Digit but you still like the idea of automatic withdrawals, you can set your bank up to send a certain amount of money to your loan servicer through your bank's Bill Pay feature. Most of the major banks offer Bill Pay, and they allow you to set the rules for the timing and amount. Participate in Loan Forgiveness Programs Loan forgiveness programs offer another angle on repaying student loans. While there are private organizations that have loan relief or forgiveness benefits, there are also programs provided by the federal government.