Paying off student loans isn’t just something that affects recent grads — one recent analysis showed that it’s increasingly a burden for older generations as well. No matter where you are in your repayment process, there are a number of ways to make paying off your loans easier, and often more affordable.
Get a better rate.
If you’re a good candidate for student loan refinancing, this is probably the most impactful step you can take to save time and money. At Earnest we save our borrowers an average of $12,588 — nothing to sneeze at. In addition to saving you money, refinancing consolidates all of your loans into just one, which means no more keeping track of multiple payments to different companies or for different amounts each month. Refinancing can simplify paying off your student loans in a big way, and it’s a one-and-done process.
Pay more than your monthly minimum.
If it’s within your means, increasing your monthly payment amount can simplify your life by getting your loans paid off sooner — and save you money by decreasing the total amount of interest you pay. For example, if you have a $50,000 loan with a 6% interest rate, you could pay off this loan in 10 years with a $555 monthly payment. But add an extra $200 to that monthly payment and you can shave more than three years off your payback period.Earnest’s Precision Pricing will save you even more money if you fully commit to a new, higher payment amount — matching your shorter term with a lower interest rate. If you’re curious about how prepayment could help pay down your own loan, a simple student loan calculator can give you a general idea of what additional payments will save you….and remember: no lender should ever charge you fees for wanting to pay down your loan faster!
Go on autopilot with autopay.
Many loan servicers offer autopay, which will deduct your monthly payment directly from your checking or savings account. No paper statements, no checks in the mail (this is 2015, after all), and you can set your payment date to make it even easier to budget each month. Some servicers even give you a discount when you sign up for autopay. At Earnest, for example, we offer a 0.25% reduction in your interest rate. Save money and make your life easier at once … who could say no?
Use a lender where you can change your monthly payment to fit your life.
With lenders like Earnest, you can pick your exact monthly payment — and then change it as you wish. Earnest makes it painless to adjust your payment, unlike some lenders, who require paperwork and a complicated process to change your monthly amount. That means when you get a raise and want to contribute more — or have a big expense and need to cut back on your loan payment for a bit — you don’t have to jump through hoops to do it.
Paying off your student loans may not be your favorite way to remember college, but these tweaks can help to make it as pain-free as possible. Now hop to it and get back to what’s important!