Last Updated on Oct 15, 2020 by James W
Student loan debt is plaguing millions of people across the United States. While many simply see debt as a necessary part of going to college, it has become a serious hindrance for graduates. In 2017 alone, 73 percent of students graduated with loan debt.
For many of those people, trying to figure out how to repay thousands of dollars can feel overwhelming. Though it may seem like these loans will take a lifetime to pay off, that doesn’t have to be the case. Keep reading to get some tips on how to figure out your student loan payoff time.
1. Use a Repayment Calculator
There are several repayment calculators available for free on the internet. These calculators use information such as your loan amount, your monthly payments, and your interest rate to help you get a good idea of how long it will take you to pay off your student loan.
2. Know Your Interest Rate(s)
Whenever you take out a loan, it’s important to understand that you will likely have to repay more than you borrowed. This is certainly true for student loans. When you take out a private student loan or a federally unsubsidized loan, interest will begin to accrue as soon as the loan is received.
For federally subsidized loans, the interest will not begin to accrue while you are a student or during the six-month grace period that is given upon leaving school.
Understanding your interest rates will give you a better idea of how much money you owe. Keep in mind that the quicker you can pay off your loans, the less interest you’ll have to pay over time.
3. Understand Your Payment Plan Options
In most cases, there will be several payment plans available to you when repaying your student loans. These payment plans are designed to make your monthly payments more affordable and will allow your loans to be forgiven after a certain amount of time.
Keep in mind, however, that there are several types of student loans. The repayment terms of Perkins Loans may vary from the terms of direct loans or Federal Family Education loans.
4. Consider Refinancing Your Student Loans
If you have multiple student loans, it is natural to want to only have to worry about making one payment. By refinancing, you can combine your federal and private loans into one loan and repay your debt to a private lender. This process is intended to help you lower your monthly payments and your interest rate.
Refinancing through a private lender may also allow you to release any co-signers you have on your loans.
5. Put a Plan in Place
Dealing with student loan debt can be stressful, especially when you aren’t making as much as you’d hoped. The good news is there are several options available to you that can make the repayment process a little easier. By following these steps, you can put yourself in a position to pay your loans quickly and consistently.