Students who received student loans from the federal government had been the beneficiaries of an extension of the CARES Act forbearance provisions to September 30, 2021. However, those who are still saddled with private student loan debt are still on the hook for that debt. According to Credible, 2.8 million of the 43 million Americans owing student loans, owe more than $100,000. This is a massive amount for a student to owe. In this article, we will discuss 5 ways to pay off your loans fast.
One of the first things you should think about doing is refinancing. Refinancing should be pursued if you can get better interest rates than those in your loan agreement. Typically, refinance lenders do not charge upfront costs so lower rates will translate to having to pay less each month, or save on interest, or at times, both. You can use online marketplaces such as Credible to lock on low interest rates. Start off by estimating your monthly payments under a refinancing agreement using a refinance calculator. Then, use Credible to compare refinancing rates. Comparing rates will not affect your credit score.
Use a Cosigner to Secure Lower Refinancing Rates
Your ability to get refinancing depends upon your credit score, which itself depends upon your credit history. If you consume a lot of debt or have a high debt-to-income ratio, you could struggle to obtain refinancing. A way out of this dilemma is to get a cosigner. A cosigner will increase the credibility of your refinancing application. They will serve as a guarantor of the refinancing agreement, so if you default on the loan payments, their credit score will decline and your relationship with them will suffer. So you have to do this knowing you will meet your obligations.
Speak to Your Employer for Assistance
Some employers offer benefits that can help you with your loan payments. For example, the CARES Act has a provision that enables employers to offer their employees as much as $5,250 in nontaxable payments to help them with student loan repayments.
Use the Debt Avalanche or Debt Snowball Method
The debt avalanche method is a way of repaying debt from the highest interest to the lowest interest rate. In this way, you save on interest. An alternative to this is the debt snowball method, which advocates working from the lowest interest rate to the highest. Understand the differences between the two before finding the path that’s best for you.
Look at federal options
Consolidating your federal loans is a good move. It won’t lower your interest payments but it will make paying your debts more streamlined. You can also look at Public Service Loan Forgiveness, if your career path fits in with the objectives of the program. The program requires you to join a federal income-based repayment plan. As part of this, you will have to make 120 payments to qualify.
Having looked at these options, and resolved your debt issues, you should look at getting title loans that don’t require direct deposit.