7 Ways of How to Pay off Student Loans

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Earning a degree is an accomplishment you’ll always be proud of but planning and paying for student loans can be stressful. In order to make the process a little easier and less stressful, knowing what to expect from the start is important.

Here are 7 ways of how you can pay off your student loans, plan ahead, and stay organized. 

1. Make sure you understand the process

Before you receive student loans, you’ll usually go through an “entrance counseling” session online. This session will give you a lot of information about what to expect with student loans. Don’t skip this step or fly through it – it’s all important information that you’ll need once it’s time to repay your loans.

2. Create your own payment plan

While you’re in school, you likely won’t be signed up for a repayment plan yet. But that doesn’t mean you can’t set one up yourself. After reviewing the cost of your loans learning the amount of your loans, the interest rates, and how long you have to pay them off, plan ahead and factor student loan payments into your budget.

3. Put money away each month while in school

If you’re an adult who’s going back to school, you probably have a lot of bills to juggle along with student loans. To support your repayment plan in the future, start putting a little money away each month. You can either start paying while you’re in school, or you can put the money in a savings account.

4. Pay off your oldest and highest interest loans first

Once you’ve graduated, you’ll typically have a six month grace period before you have to start making student loan payments. It’s best to start paying toward them right away, but you also want to start paying the oldest loans and the loans with the highest interest rates. This will save you money in the future.

5. Pay more than the minimum

Once you set up a repayment plan and start paying toward your loans, pay more than what you agreed to. You don’t have to commit to a higher payment, if you can’t pay that much each month. But by adding a little extra onto your payment each month, you’ll pay them off faster and with less interest.

6. Look into tax deductions

Depending on your state and a few other factors, you might be able to receive a tax deduction for the interest paid on your student loan payments that you made. With the money you’re saving in taxes, put it toward your student loans.

7. Consolidate your loans                                                                 

If you have several loans and are no longer in school, consider researching a consolidation plan for your student loans. A consolidation loan aims to combine all your loans so you only have one larger payment per month instead of several smaller payments.

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