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Does it feel like your student loan payments are overwhelming? If so, you’re not alone. Check out these tips to help you get organized and pay down your debt.
Make all your payments on time
With a perfect payment history, you might be able to get your debt reduced or even forgiven down the line. But missed payments—even a single one—may exclude you from some programs that can help you.
Get organized
You might graduate with multiple student loans, maybe even half a dozen or more. That can mean a lot of payments to keep track of.
So set up a simple chart to track your payments. List each loan, where each payment goes, the minimum amount, and the due date.
Make it easier—go automatic
You can usually set up automatic payments from your bank account. That way, you won't need to remember every loan every month. Even better, some lenders will knock a quarter of a point off your interest rate if you sign up for their automatic loan payment programs.
Automatic payments can help you make sure you always pay your loans on time—just be sure you keep track of your payment schedule so you don't accidentally overdraft your account.
If you can't set up automatic payments, consider setting reminders for yourself—such as on your phone's calendar—so you don't miss a due date.
Write off your interest
No matter how you pay back your loans, you get a tax break. You can deduct the interest you pay, up to $2,500 (depending on how much you earn).
For example, if you're in a 12% tax bracket, the deduction could save you up to $300 each year in federal taxes.
Make a bigger dent in your debt
Want to be a student loan debt buster? Here are two strategies to knock out your debt faster:
Pay more than your minimum payment each month
Increasing your payments will reduce how much you pay in interest over the years. So if you can make it work with your budget, consider paying extra—even if it's just a little bit more.
If you're ready to pay extra:
- Contact your lender to make sure excess payments are applied to your principal balance, not toward future payments.
- If you have multiple loans, consider applying those additional payments
to the one with the highest interest rate first. Once that's paid off, aim for the loan with the next highest interest rate. And so on. Just be sure you're making the minimum payments on your other loans while paying extra on your highest interest loan.
To learn more about how paying down your debt from highest to lowest interest benefits you, read this article.
Make half of your monthly payment every two weeks
You can use this approach instead of making one full loan payment each month.
How it works: You'll be making 26 half-payments each year, not 12 full payments. So you'll end up making one extra full payment a year. In the long term, this strategy can save you hundreds, or even thousands of dollars in interest.
It's important to note that, with this approach, you'll be making your payments every two weeks, rather than twice each month.
Keep in mind: Everyone's situation is different. You might want to speak with a financial advisor about your own situation.
Consider consolidating
But if you consolidate, try to keep the same loan term. For example, if you have 10 years left on your current loans, try not to extend the term beyond that. If you do, your monthly payments will be lower, but you could end up paying more interest over the long run.
Important: Federal direct loans may qualify for government loan forgiveness programs. But if you consolidate these loans, you might not qualify for these programs. So consider leaving your direct loans out of any consolidation if it makes sense for your situation.
Having trouble affording your student loan payments? Help may be available. Read this article to explore your options.
Get help from the federal government
Check out your options on the Federal Student Aid site.*
Some examples of loan forgiveness programs include:
Public Service Loan Forgiveness Program
Teacher Loan Forgiveness Program
You can earn forgiveness for a certain amount of your loan by working as a teacher in a low-income school district or educational service industry for 5 consecutive school years.