Pay Off Student Loans and Other Debt

Pay Off Student Loans and Other Debt

Are you tired of paying off your debt?

Debt can feel overwhelming and exhausting, especially when you have multiple debts. But you don’t have to feel this way.

We can create a strategy to reduce that debt burden and get you on a faster track to be debt-free. We can help you determine which repayment plan would be best. We can look into Public Service Loan Forgiveness, or consider refinancing your debt to a lower interest rate and monthly payments. We can also look into using the debt snowball or avalanche method.

When you are in debt it can feel like you are fighting an uphill battle. But if you have a strategy in place and can see the end in sight, it can become very motivating. Having a good debt payment strategy in place is essential to achieving your financial goals. Hiring a financial advisor can be the best way to help ease your debt anxiety and find the best strategy to pay off your debt faster.

 

Pay Off Student Loans

Some strategies that we may recommend to help you pay off your debt include: 

  1. Make extra payments: One simple way to pay off student loans and other debt is to pay more than the minimum every month. The more money you pay towards your debt, the less interest you will pay overall, and the faster your debt will disappear. Before we do this, we need to ensure that there are no prepayment penalties. 
  2. Enroll in autopay: Late payments can hurt your credit score, which will then affect things such as purchasing a house or taking out another loan. Scheduling your loan payments and enrolling in autopay means that you don’t have to worry about paying late. Some lenders also offer a discount for enrolling in autopay. The discount may be small but it still makes a difference over time. 
  3. Refinance: In some cases, refinancing your loan can help you pay off your loan faster without making extra payments. Refinancing means that you take out another loan to pay off all of your existing loans so that you have one monthly payment. If you find one with a lower interest rate then you could potentially save money. 
  4. Use the extra money to pay off your loan faster: If you get a tax refund, a bonus, a raise in your job, or any other situation that arises where you get extra money – we can put that towards your debt rather than spending it on something else. 
  5. Public Service Loan Forgiveness programThis program forgives the remaining balance on your federal student loans once you have made 120 qualifying monthly payments. You need to do this while working for a qualifying employer and make the payments under a qualifying repayment plan. While the rate of actual forgiveness is quite low, there are strategies we can use to significantly increase the chance of an effective loan forgiveness.
  6. Debt snowball method: This is where you pay off your debt from smallest to largest. You will still make the minimum payments for each loan. Once you have paid the smallest debt in full, you then roll the payment you were making on that debt to the next smallest debt payment. This method doesn’t take into account interest rates. It is a great option if you have multiple loans and are motivated by seeing progress and your debt being paid off. 
  7. Debt avalanche method: This is where you pay off your debt depending on the interest rate. You pay the debt with the largest interest rate first and after that one is paid off, then you start paying off the next highest interest rate debt. You will still make the minimum payments for each loan. This is a financially sound strategy since it results in lower interest rate payments over time.
  8. Pay the required payment: There may be times when the best action is to stay the course. If you have debt where the interest payments are really low, and you have sufficient disposable income for your other goals, it’s possible that just paying the required monthly payments may be the best course of action.

Which debt strategy is best for you?

Getting a handle on your debt can be intimidating. There are plenty of strategies to pay off your student loans and other debt faster. Our team of financial planners can help you decide which strategies can work best for you. We want to help you on your path to being debt-free.

Schedule a free discovery call today