You’ve graduated from college — congratulations! You’re free from the endless drudgery of lectures, taking notes and finals week. The one thing from your college career you’re not free from is your student loans. Your lingering student debt could crimp your future plans for things like buying a new car, a home, marriage, traveling, putting a child through college and a financially secure retirement. But if you act now, with the help of a student loan calculator, while you’re still young and unencumbered by future debts sure to come your way, it doesn’t have to be the milestone that drowns your joie de vivre.
Now don’t fret, you’re not alone. Most people struggle with debt. The tension of paying debt becomes — well — tense! That’s why many people have the attention span of a cocker spaniel when it comes to budgeting and following through on debt-repayment plans. It seems easier to ignore the debt, wing it or put it off with extensions rather than starting to take care of it right now and eliminating the debt sooner.
There are many effective strategies for attacking and subduing your student loans. But one in particular stands out: One of the best and most successful student-loan payoff strategies, and one recommended by many financial planners, is to make more than your monthly payment amount each month. The math decidedly speaks for itself.
Any extra money you apply each month beyond your traditional monthly payment is applied toward principal, reducing the amount of interest you pay the lender and shortening the lifespan of your loan.
Now that you’re free from school, you can travel the world, live on your own, sell your “starter” car and get a new one – right? Well if you’re included in the almost 70 percent of college students with student debt, chances are you won’t be living the post-grad life you see in the movies anytime soon. But there are a few simple, cost-effective ways to help pay off your debt faster and live comfortably while working an entry-level job – starting with biweekly loan payments for your student debt.
Biweekly loan payments allow you to make half-payments every two weeks, totaling 13 full payments at the end of the year instead of 12. This extra payment will pay down principal faster and reduce your interest in the long run, and ultimately get you out of debt ahead of schedule — all without breaking the bank. So fellow graduates, get out your notebooks, because here are a few tips to pay off your student loans faster.
Use a Student Loan Calculator. A payment calculator will give you a visual of what you’ve already paid for your loan, how much you still need to pay and how long it will take to pay it off. It can be beneficial to use a student loan calculator before accepting a loan in order to see what your payments will look like in the long run. By having a loan calculator like the one available on AutoPayPlus.com, you can determine how large of a payment you need to make every other week in order to make a dent in your debt payoff while still enjoying the post-graduation lifestyle you want.
Adjust Your Payments According to Life Events. Did you get a new job or a promotion? Factor this increase in take-home income into your loan payments. Consider increasing your biweekly payment to pay off the debt faster while still being able to do the things you love. You can help calculate this increase by using a loan payment calculator. If you plan on traveling or making a large purchase, be sure to factor in your loan payments – never decrease a loan payment if at all possible.
Keep Your Head Up and Dreams High. Paying off loans can be stressful and confusing, but AutoPayPlus is here to help make your payments easy and efficient. It’s important that you make timely and full loan payments in general, but it‘s especially important as other important life events occur. Getting married, having children, buying a house and traveling can all be hindered or put on hold indefinitely if you’re still swimming in student debt. Making a payment may seem painful at the time, but the reward of paying off your loan earlier and being able to do all of the things you dreamt about during college will definitely be worth it. Your future self will thank you.
With that said, it’s time to graduate your student loans to a biweekly payment program.
With a biweekly payment plan, using your student loan calculator, your regular monthly payment is cut in half to arrive at your biweekly payment amount. You pay that half-payment every two weeks, which equals out to 13 payments per year instead of the traditional 12 payments. The benefit: That extra payment goes directly toward reducing the principal balance on your loan, saving you money on interest you’d normally pay to the lender and potentially hacking years off your time to student debt freedom.
Applying to anyone with large debts or those with higher interest rates, it’s one of the easiest and most effective strategies to reduce debt faster and save money. With the right biweekly payment plan, everything is done for you, even the ideal setup, scheduling, withdrawals and documentation you can access at any time and much more.
You can also set up an automated payment plan that coincides with your paychecks with this extra amount added, taking any indecision out of the equation and making following through on debt reduction much easier. Now you have more time to play, or rather focus on your new job in the real working world, than stressing over paying monthly debts.
AutoPayPlus can help you pay down student debt faster. Withdrawals from your account every other week fit conveniently with paychecks and your monthly budget, while an extra half payment twice a year toward principal reduces interest over the life of the loan. Please visit our website to learn all the details about this exciting program.
Here’s an example of how much money you can save by using biweekly payments to pay off your student loan. If you had a 10-year, $55,000 student loan with an interest rate of 6.8%, using AutoPayPlus, you could shave more than a year off of your debt payment and save more than $2000 in interest. Biweekly payments for your student loan is an A+ strategy for your financial future!
Please visit our website to learn more and use the AutoPayPlus loan savings calculator to experiment with various loan and extra-payment scenarios to see just how much money you can save for yourself and how many years you can shave off your loan for earlier debt freedom.
For more information, visit our website or call (800) 894-5000.