Some student loans don't incur interest until after you graduate, while others incur interest over the life of the loan.
College tuition continues to rise, as well as the cost of housing, books and other course fees. This has caused more and more students to take out loans to be able to afford a higher education. While college loans are an investment in your future, being able to manage your loans and pay them off quickly is an important part of the student loan process.
Start Repayment Early
Some student loans, like a Direct Unsubsidized Loan, incur interest throughout your college education. Other loans, such as a Direct Subsidized Loan, have a deferment period of up to six months after you drop below full-time college attendance; during this period interest is not incurred and payments are not due. To pay off your student loans quickly, either take out a Direct Unsubsidized Loan and opt to pay interest during your college education or, to save money and pay off the loan quicker, take out a Direct Subsidized Loan and pay toward the balance of the loan whenever you have a little extra money. The amount that you pay while still in the deferment period will not incur interest, therefore saving you money in the long run. If you then don't have to pay as much in interest when your loan goes into repayment, you may also be able to pay off your loan in fewer monthly payments.
Increase Your Payment
Most student loans, once they've reached repayment, require a designated payment to be made monthly. This payment can be a fixed amount due until the balance is paid off, or it can be a sliding scale where the payment amounts gradually increase based on the idea that a student will make more money over time. Contact the institution that you have the loan with if you'd like to change your monthly payment amount. If you can afford to pay more each month, have them set a higher payment. By paying more than the minimal amount each month, you will be able to pay off your loan sooner and not have to pay as much interest.
Use Other Sources of Money
To pay off student loans quickly, consider using money that you get from other sources to pay down the balance of your loan, such as a cash gift, or money from a work bonus or a tax refund. If you pay toward the loan that has the highest interest rate with this extra money, it will allow you to save money in the future.
Only Borrow What You Really Need
One of the biggest mistakes students make is taking out a loan for too much. The more money you borrow, the more you will have to pay back---with interest. If you are working while in school, even part time, and you can afford to pay for a few things without having to borrow money, do it. Even something as simple as paying for your books each semester with the money you make will help you have less debt when you graduate or exit college.
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