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4 Ways to Pay Off Your Student Loans Faster

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4 Ways to Pay Off Your Student Loans FasterSo you have student loans and can’t wait to get them paid off? Join the club! There are millions of people across the U.S. who are in that very position right now. Some are struggling, some are making progress, and some are just getting by.

For those who are looking for ways to pay those student loans off faster, here are four solid tips that can get you debt-free quickly.

1. Reduce interest rates if possible.

Almost every student loan lender (including the Department of Education, which is the lender for all federal student loans) has some kind of interest rate discount for people who set up direct deposit. Usually the discount is about 0.25%. The lenders prefer direct deposit because it increases the likelihood that you’ll continue to make on-time payments. And while 0.25% may seem insignificant, it’s actually very significant — because over the course of 10 (or more) years it can knock off a big chunk of the interest you’ll pay over the life of the loan. In fact, if you have a loan amount of over $20,000, that “insignificant” discount could save you hundreds of dollars. Which would help you get out of debt faster.

You should also check with your lender to see if they have any other interest rate deductions. Some lenders may be able to reduce your interest rate based on factors like having a high credit score or having a history of on-time payments. It’s always good to double check — you never know what you might find.

A final consideration is whether it’s worth doing a loan consolidation. The federal government (and some private lenders) offer consolidation loans for their borrowers with student loans. In some cases, you can also reduce your interest rate with one of these consolidation loans. What you need to pay close attention to, however, is the effect it will have on all your loans. For example, it won’t help you if one of your loans winds up with a lower interest rate (after consolidation) while another one ends up with a much higher interest rate.

2. Make more frequent (or bigger) payments.

This sounds obvious, but it still deserves your attention. Sure, the easiest way to pay off your student loans faster is to simply pay more each month. But how much more should you pay? And will your lender accept it — even if you pay early? The answer is, yes, the lender is supposed to always accept your payment. And as for how much extra you should pay each month, you should first decide what percentage of your monthly income you think you can afford to send to your student loans.

Most people start with somewhere around 5-10% of their income — although for others the amount of their student loan payments makes up a much greater percentage.

So you’ll need to figure out how much you can afford to pay and then make a plan for how to do it. One method that can help you pay off student loans faster is biweekly payments. Basically, with bi-weekly payments you make a half-month payment every two weeks. Since that means you end up paying 26 bi-monthly payments (the equivalent of 13 monthly payments) per year, you will chip away at your student loan balance much faster.

Just make sure you’re not overpaying one month, then missing your next payment. Any missed payments can hurt your credit score, costing you more money in the long run when you want to buy a home or get a credit card. Your payment history is one major component of your credit score. If you want to monitor your credit, you can get your Credit Report Card, which gives you a truly free credit score and also gives you a grade for each of the major components of your credit score so you know what to do to improve it.

3. Earn more income to put toward loans.

Of course, it’s hard to put additional money toward your student loans if you don’t have additional money in the first place. One way to gain extra income is to take up side jobs. There are an almost unlimited number of side jobs out there, and depending on your abilities and preferences you can no doubt find one that suits you. Perhaps you’d be able to tutor a local high school student, teach music lessons, or sell crafts you make.

Also keep in mind that if you have a skill such as writing, designing, etc., then you can always do freelance work. With freelancing, your weekly hours are pretty flexible and at the same time you can earn a significant amount of money.

4. Budget better and save money.

No matter what else you do, it’s extremely important that you become a master of budgeting. Your budget will be the one thing that guides you to paying off your student loans faster. Without a budget, you’d be hard pressed to know exactly where your money is going.

With a budget, however, you can plan exactly where your money goes each month. And with that kind of control, you can ensure you have enough left to pay your student loans every month. To accomplish this, it will help to save money in every aspect of your life. When you go to the grocery store, look closely at the prices of each item you buy. Ask yourself if there are any impulse purchases in your cart that you don’t really need. If so, put them back. Meanwhile, try to only buy reasonably-priced items. Luxuries can wait until after your student loans are paid off.

And it should go without saying that you should try to limit your trips to restaurants (and movie theaters, concerts, etc.) while you’re paying off your student loans. These kinds of expenses are exactly the ones that will eat up your income for paying off debt and will prolong your exposure to indebtedness.

Hopefully these tips are helpful. With the right plan and a bit of determination, you will definitely get those student loans paid off faster than you might think. Let us know in the comments below what your main challenge is when it comes to getting out of debt.

If you’re interested in learning about how student loans and other types of debt may be impact your credit, check out Credit.com’s free Credit Report Card for an easy-to-understand overview of your credit standing, along with your credit scores.

Image: iStockphoto

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  • http://Credit.com Ian

    Thanks for the good tips.

    We often address questions about whether or not one can refinance a student loan and how. As I’m sure you know, it’s not that easy. Although we do see people taking out other loans, or even refi’s to pay down their loans. When does this make sense?

    Thanks,
    Ian

    • http://blog.readyforzero.com Benjamin Feldman

      Hi Ian,

      Unfortunately, I don’t have an easy answer to that question. Depending on whether your loans are private or federal, there may be different options available to you. In general, however, I’d recommend contacting your current lender as a first attempt. Sometimes your lender will be willing to modify the terms of your loan. If not, then it is worth asking at your local credit union or community bank. Occasionally they will be able to help you. Keep in mind that, as with a consolidation loan, refinancing can sometimes reduce your interest rate (which helps you get out of debt faster) but it also can reduce your required monthly payment (which will lead to paying more interest in the long-run if you switch to that lower payment amount).

      Hope that helps,

      –Ben

      • alt1377

        Thank your lovely Republican legislature for student loan rate increases.

  • http://www.budgetforwealth.com Long

    My wife and I paid off over $39,000 of her student loans in 9 months by making larger payments and working overtime to earn more money to pay off the debt. Solid, time tested, advice here.

    • JW

      So you paid over $4,000 monthly no one I know can afford that!!!

      • Andrew

        Depends on the job I think. If you have a good job that pays around 50 to 60k per year, then that’s more than doable.

        Got a job right out of college as a software engineer. I make 53k yearly which means I get about 2800 monthly after taxes. I put in 2k into my loans and $550 into renting a room I’m sharing with a condo owner. The rest of the 250 into groceries and gas. It’s tight, but if I keep doing this, I’ll be out of debt in a little under a year with 19k left to go. I started with 28k. 2k I owed to the college I went to via Perkins Loans and the rest are subsidized and unsubsized loans from the government.

        That being said, I know a lot of friends and schoolmates with less than stellar job prospects. My closests friends who went to tech schools for engineering easily got jobs, one making around 60k yearly and the other got 70k with a whooping 50k signing bonus (120k right out of college is bonkers, but he’s a computer engineer so he’s technically underpaid if you look at averages. I’m familiar and seen the work he has done and he deserves way more than 70k salary.)

        On the lower end, a friend got a teaching job that starts at 40k. It’s not a bad job and if she keeps her job, she could end up with up to 80k yearly after about 20 years of working like my mother who teaches math at a high school. (My mother started out at around 30k when she started teaching.)

        Of my classmates who went into non-engineering fields or liberal arts, the most charismatic of them got a job in Human Resources at IBM. While he is not exactly techy, he’s definitely got people skills and knows how to read people.

        I’ve heard of an interesting suggestion for higher education to help ease the difficulty in job finding after college. Instead of barring students from taking “useless” majors in the liberal arts, just add engineering to every major. Engineering + Art. Engineering + English. Engineering + Philosophy. Engineering + Sports Management. That way, if they can’t find a job as writers, philosophers or artists, then they can fall back as programmers or engineers.

        Many of the engineering jobs that were offshored ten years back are actually coming back since companies have found that they can’t pay less to get more in terms of engineers. When I got my job and I started to look at some of the code written by offshore engineers, my mind was blown at how incredibly inefficient the code could be not to mention unreadable and sometimes unmaintainable. Not my company is in a mad hiring spree to try to fill as many engineering positions as possible to build up their talent pool and get the life blood flowing again.

        • Gerri Detweiler

          A good income definitely helps to pay those loans off faster. But as you explain, so does being frugal and paying them off as fast as you can with that income! Thanks for sharing your story.

        • Jeff U.

          “I’ve heard of an interesting suggestion for higher education to help ease the difficulty in job finding after college. Instead of barring students from taking “useless” majors in the liberal arts, just add engineering to every major. Engineering + Art. Engineering + English. Engineering + Philosophy. Engineering + Sports Management. That way, if they can’t find a job as writers, philosophers or artists, then they can fall back as programmers or engineers.”

          Uh, no. Just no. Engineering majors already have to take a larger courseload than most undergrads to meet ABET requirements, do you really think that a minor in engineering is going to get any recognition from a real engineer, much less an engineering firm? I’m talking actual engineering: electrical, mechanical, chemical, aerospace… not programmers and IT people misusing a title they haven’t earned.

          • P

            Agree with Jeff U. — how many English majors do you knwo are good enough at math, physics, etc. to get an engineering degree? Also, there wouldn’t be much overlap in courses, so you’d be looking at a few extra years — and likely need more loans to pay for that. If engineering degrees — and I don’t mean some cracker jack box diploma or certification — were so easy to get, more people would have them.

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  • http://www.matthewwrobinson.com matthew

    Not helpful. Made the mistake of going to grad school and have large debt. Interest is 8,000 a year for a two year program.

    They should not allow confused loan advisers and young people to take out loans. I would actually try to pay off my school if the interest was frozen at a rate lower than 2%.

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  • Rosemary

    I accrued about 30K in graduate degree loans. The problem with an automatic payment deduction is that sometimes these programs do not apply to students located outside the country. We also received an email about consolidating the loans, but we were required to call and request the change by telephone, from a foreigh country. We left several messages, but of course, no one returned the call. The call volumes make it impossible to get in touch with a live person. We also had difficulty updating personal address and contact numbers, as the websites would not accept the information, unless the address could be formatted like a U.S. postal address.

    There are minor changes to programs that would benefit students if they could be applied to all situations.

    Happily, we worked very hard to budget money, and paid off the largest loan last month, and half of the smallest loan.

  • Erika

    Great article! I will definitely try to use these tips as I start paying off my under grad loans! Is it safe to budget 30% of your income to pay off loans?

  • http://nathanpetty.com Jessica

    I’ve been paying off my student loans for the past thirteen years and have never missed a payment. Thankfully I only have a couple years to go. I would LOVE to talk to a high school graduating class and tell them to learn a marketable skill (dental hygienist, electrician, etc.) rather than go to college. You want an education? Check out a book at the library.

    • Juan

      Totally agree with Jessica. I received my Bachelor of Architecture degree in 2010 and the value of that degree is not worth the almost 100K tuition I paid. No recent architecture graduate, I mean no one, will start making anything over past 25K per year. Seriously. I understand Doctors and Law degrees that cost 250K but then are offered 75K+ salaries upon graduation, but degrees like architecture should be closely scrutinized for the ridiculously high tuition costs and negligible return on investment upon graduation. I have friends that paid 10K for a medical technical degree and are making over 50K a year. Please explain the return on investment to your kids when choosing a career!!!!

      • Rod

        Ummm…you better guess again! They don’t just hand out $75k jobs to doctors and lawyers upon graduation like you instantly win the lottery. I’m a doctor and had about $220k in student debt. The payment was more than my mortgage. I made $24k out of school for my first job. I took the job so I could gain as much experience as possible working for a rock star doctor. I delivered pizza at night to make ends meet. I was in the clinic at 8am and didn’t get home from delivering pizza until after 2am on some nights. I busted my ass because that’s what I saw my old man do and he taught my brother and I that hard work and a strong back would lead to our success. Now I own my clinic and have two houses. I’m 8 years out of school and I could already retire on the money I’ve saved but I still work 6 days a week. Yes, that’s right I work six days a week and don’t live on the golf course. If Obama screws everything up, I’ll quit medicine and bootstrap a new business from the ground up…

      • StevenR

        Law school grads don’t make 75k. That is a myth. The top 10% of the top 10 schools, MIGHT make that kind of money.

        The average job after law school is somewhere between 45-55k in CA.

  • Karen

    I’ve been out of grad school since 2009 and took no time off between undergrad and grad school. While my loan balance start out extremely high, I have a decent paying job in public account and have been able to make on-time montly payments for 3 years now. Taking on a side job or a part time job isn’t really an option for me since my fulltime job is a 70+ hour a week job, but I have found that having a Upromise account has helped out a lot. I make my normal payments monthly but then ever quarter the “cash” back that I’ve earned is automatically posted against my student loans. My parents also have an account so they help me earn “cash” back too. I put everything on that card including my rent payments, and pay it off each month. Online shopping thru their links helps increase my balance while staying on a budget. While this isn’t an option for everyone over the past 3 years over 1,500 extra payments has been applied to my student loans.

  • Phil

    Wow, thanks for those tips! I mean, who would’ve thought of things like paying more and getting more income as ways to pay off student loans faster? Maybe you can write an article about the top 2 ways to avoid getting fat: eat less, do more?

    • Juan

      I understand your frustration Phil. I have turned over every stone that I could think off looking for a real solution to the student loan debt problem (other than the obvious,) but the truth is that student loan corporations have the system down tight. It doesn’t help that they are in bed with our politicians. There is no out… in college, I had a friend that told me he would move to another country so he would not have to repay his 100K tuition. I thought he was joking… until he moved to another country upon graduation…

  • Claudia Reithauser

    Dear Benjamin, Your insights are very valuable and I hope the recent grads reading this site will take your advice to heart. I graduated from law school over 12 years ago and recently paid off approximately $90K of debt by budgeting, working hard and dedicating $1,000 a month to my payments (rain or shine). Boy, it wasn’t easy and I often had to say no when my friends were doing things that my budget wouldn’t allow, but I did it.

    I drove older cars, while friends were driving more expensive ones. I bought a smaller house, while friends bought the biggest houses they could afford. I kept my credit card debt to a minimum while friends maxed their cards out. My disciplined approach finally paid off. I am 41 and debt free now (with the exception of a home mortgage with an amazing rate of 3.5% for 30 years) and have managed to buy a rental property, a home and have reasonable retirement account in the meantime.

    I have friends that are overwhelmed by their debt (whopping graduate and undergraduate debt combined). I have counseled these friends and others over the years. Fortunately, I happen to work for a top private bank in the country and have learned a lot about debt and finance over the years. My advice to new graduates (and old graduates) would be multifaceted as follows: 1) First and foremost, try not to get caught up with what everyone else is doing. Most of my friends that look like they have a lot of money actually have a lot of debt. 2) Find the best paying job you can find out of school and manage your career wisely. Managing your career means making sure that you only accept jobs that give you the experience you need to get a better job in the future and also making strategic moves periodically to find better paying jobs. As you are progressing in your career, don’t just focus on the numbers, try focusing on developing your skills and growing professionally. It will all pay off in the end. Think of your career as a marathon and not a sprint. 3) Figure out how much you can afford to pay and start paying those loans and don’t skimp. If you are going to make extra payments, focus on the loans with the highest interest rates to get rid of those first. Think about it… would you ever walk into a store and find a shirt or a pair or shoes and then agree to buy it but have to pay 6-8% more? No way. You usually look for 10-50% sales! Don’t voluntarily pay the higher interest rates. Be strategic in your loan repayment. The faster you get rid of those loans with the higher interest payments, the faster you can focus on the smaller ones. 4) Be mindful of your credit card debt. You may think that your school loans are killing you, but you might be surprised to actually see how much you are paying on a yearly basis in interest on credit card debt. Education debt is usually good debt while outstanding credit card debt is not helpful to your financial fitness. Good luck and remember, discipline, discipline, discipline.

    • Christina

      My position is that I have $130k in student loans and I am a lawyer. I am 8 years out of school and passed my bar on the 1st try. Even then, the jobs I could get were underpaid for what Sallie Mae wanted from me each month. Over time, I used up all the forebearances and deferrments they allow, then I had to go on a 4 year, graduated repayment program, where I was making interest only payments, because I couldn’t afford the $900 monthly Sallie Mae, on top of the $200 Federal Loan Payment. By year 2 or so of that plan, I was actually going backwards by about $4 each month on the interest…and my principal was going up by that much each time they compounded it..quarterly, I think….So after 4 years, my principal is larger than it was when I started. This past year, I have Finally landed THE JOB, and things are looking like they will be manageable again within a few years.
      I wrote all this so that I could share some of the pitfalls I experienced along the way that aren’t covered in the article, but that I feel sneaks up on a LOT of people.
      SO TO BEGIN, the article is excellent advice, and my own plan. I haven’t yet had a chance to institute it, because I did fall into the nicer car, credit cards and the bigger apartment, etc. etc. I have scaled back and haven’t used a credit card in almost a year; my fiance lives with me, so his extra income helps us both; we rent a room in our apartment for extra money; and I was able to get my mom, with excellent credit, to help me transfer my credit card balances to her cards, with limited time 0% interest…then I pay them Ontime, Every Month, Without Fail. (I won’t repay this huge favor by hurting her credit!)
      All of that stuff mentioned in the article is obvious to me, but some other financial pitfalls I’ve taken that might not be so obvious to all are, 1) I eat out Way too much…the stress of being financially overwhelmed, of a hard job, of being tired and worn out from being stressed overweight, all makes it very hard to come home and cook at night. So eating out is a double whammy for me…it’s much more expensive, and it’s not helping the weight issue. I keep trying to cut back, and each time I try and fail, I get a little better at it. I try to look back and see what it was this time that made me go off the rails. Most of the time, it’s that I simply need to go to the grocery store – I come home and there’s nothing good to cook, or it’s still frozen. So planning the food you buy and making sure you Get to the store can help people from eating out so much. I know it’s a problem a lot of people have. One good way to see if you’re one of them, is to go through your checking account history for 30 days and add up how much you spent on fast food and restaurants in that time frame. Then think of a meal you like to buy out, and go buy the ingredients to make it at home….you’ll see that it is incredibly cheaper to do so. Your 1st grocery bill might not be tiny, because you might have to buy things that will go further than one meal, like a bag of flour or something….but you’ll have that flour for the next time you make it or something else…so it works out over the long term. Once your house is stocked with staples, the cost of preparing meals is SO SO much cheaper it helps spur you on.
      The second huge pittfall I’ve gotten myself into, and this time with no acceptable way out, is that I have pets. I have 2 indoor cats that need to be fed properly, cleaned and cleaned up after, taken to the vet regularly, and one that got very very sick and I had emergency vet bills for him. I am an animal person, and I take the responsibility of caring for my pets to the exact same level that I would if they were children. Not everyone feels this way, but more and more people do. Their food alone is $100 a month…but the good food keeps them healthy and so less vet visits…I have really really found this to be true. People can’t believe how old my cats are, because they look and behave as if they were younger.
      I can’t advise getting rid of any pets you have. It’s a responsibility you chose, and as hard as it is on you to get rid of what you love, its harder on the animal that’s attached to you and doesn’t understand why you are suddenly not in his life anymore. What I can advise is that people realize that having a pet is a privilege and a responsibility, and if you’re spending there, cut back in other extravagances. Do not consider pet ownership an unavoidable cost of living, and thus maybe you can splurge on something else now and again. Realize that owning the pet IS splurging, and so you need to replace those worn out shoes with the $50 pair of office heels that work just as well as the $300 pair. (Don’t go all the way to the $30 pair, cause you’ll just end up buying another $30 pair well before the $50 pair would have worn out. Be smart when it comes to purchases…lowest price tag isn’t always the most cost effective choice.)
      I can also suggest waiting to get that pet until you are truly set into your career and have that steady, reliable income. Also, pet ownership extremely limits your choices when it comes to places to rent. I’ve often thought of moving to a less expensive apartment, but they are harder to find if one has animals…plus while I wouldn’t feel too bad about being crowded in on a temporary basis, I would feel guilty about taking away their space when they can’t understand why it’s happening.
      Finally, realized that if you are a woman, it is simply more expensive to get what you need to function in a professional world. Bras for instance, you need at least 7 good ones, and you’ll need a sports bra so you don’t ruin. And if you’re bigger than a B cup, you need good bras-not the $12 Walmart ones. Those run are about $30 each, though you can wait for good sales. They also wear out and need replaced.
      And let’s face it, if you work in an office, especially if you have clients to keep happy, almost every woman out there wears make-up. And almost every woman uses/needs more skin care than men do. This can get REALLY expensive.
      The trick to making sure you have what you need to suceed is to strike a balance between making sure you get the quality you need in your stuff, but also resisting the Very Tempting urge to get that eyeshadow you don’t need or the sexy bra that makes you feel good, but isn’t supportive and is uncomfortable. Figure out what you need Before you get into the store, and stick to those products when you get to the counter…no matter How much the lady at the counter pushes. If you have a hard time saying no, you can take home a sample of a lot of stuff; and if you still get suckered into an unneccessary purchase, things are returnable. (Even a purchase of something you need, but that doesn’t work out…you’re not stuck with it…these items ARE returnable. Some people don’t think they are.) In this way, shoes are much more dangerous impulse buys, cause once they hit the ground outside, unless they fall apart, they aren’t returnable.
      Anyway, this is way too long. In short, what I meant to say, is to examine some habits you have, and see if they are costing you more than you think they are. You can shave off costs that really add up in the end. And when you shave them off, make sure they go to those dang loans…mail/call it in separately…Stapled to a letter, if you have to…and direct which loan it is to go to and state in big black bold letters that it is a principle payment. Lenders are supposed to automatically put extra money on principle, but with many it is like pulling teeth to get it applied correctly…they’ll just apply it to next month’s payment…which in the first half of the life of your loan, is divided up and more goes to interest than to principle.

      OH! One last thing! Cut out as much Alcohol as you can, and if you do get it, buy it and take it home. We complain SO SO Much about $4 a gallon for gas. How much is your beer, wine or liquor per gallon? Do you get enough pleasure from that alcohol to make it worth that much a gallon? Plus, you’ll be healthier. (same goes with tobacco! It’s fricking expensive!)

  • Harvey Canter

    My daughter graduated with her BA in 2011 with only a small amount of debt, so her problem is different than most here. She took a low-paying job working with adult literacy in the inner city, but one of the features of the job was that after 1 year of service they gave her $5,000 towards outstanding student loans. That was all well and good. Now she realized that the money, which was paid on a 1099, counts as “income” and she owes nearly $1,000 tax on it! Is there any way to offset this apparent windfall of income, which she garnered by working at near poverty-level wages, and which now leaves her with yet another debt? She has never had to deal with 1099 earnings before so this caught her totally by surprise, or she would have put some of the money away for taxes. I told her there may be some kind of way to offset it, but I don’t really know for sure. Any ideas about that? Thanks for any help you can provide.

  • Mike

    Really? Your advise is “Make more money” “Pay more money” and “Budget Better”. You might as well add “Marry someone with money” or “Hope a rich Uncle passes away”. This isn’t advise. It’s common sense.
    What’s amazing to me is that with interest rates at all time lows (3.5% on mortgages) student loans are 7%, 8% and 9%. With no way to get the lender to lower it. The lenders are getting this money from the Fed at 0.0% – 0.5%, yet the student is paying 1980′s interest rates. IS that fair? Is education really worth it when their are no jobs, let alone, higher paying jobs when you do finally graduate. Unless writing a Blog pays well…

    • Nathan

      Mike, I agree with you 100%. The cost of colleges in this country is abysmal when compared to the amount of high paying jobs that these higher learning institutions claim will be waiting for students. The college-industrial complex is growing out of control. I feel so blessed that I have graduated and am moving forward with a career… too bad I, like others here, are stuck with an unreasonable student loan rate and $1000′s to pay off.

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  • Genny

    Hi, Benjamin! I’ve written a screenplay to pay off my student loans. The problem is… HOW DO I GET IT SOLD!?! It’s not as easy as I thought it would be to sell it. Any advice? Now, I’m thinking about writing a book version of the movie. Maybe I could sell some books.

  • Tammy Jackson

    Make four extra payments a year on your student loans and pay them off in 5 years instead of the traditional 10 years. Do the math, it works!

    • BCB

      Do the math? Math is the problem! If you don’t have enough money, how are you going to make 4 extra payments?

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  • Chris

    My wife and I just took $7,500 from savings (earning 0.75%) and paid off the remaining student loan debt I had (4.25%). What a great feeling!

    Part of our financial goal was to eliminate all non-mortgage debt by the end of 2013 and we have $18,000 in student loan debt remaining from her graduate studies. It has a rate of 6.625% and has already been consolidated. It is currently held by OSLA (Oklahoma Student Loan Authority) which took over the loan servicing from the U.S. Dept of Education a year or so ago.We are paid ahead on it and always put any windfalls against it, but would be nice to be able to refinance that to a reasonable market interest rate to have more of that payment go toward principal.

    Any suggestions for where to move it?

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  • cindy lee

    i have a parent plus loan. does anyone know if it’s possible to transfer that loan to my child that went to school on it? I’m not the one that used the loan for school so i don’t understand why I have to pay it back. my child has a full time job now, but he insist that since the loan is in my and my husband’s name we are the ones that should pay for it.

    • Liz

      That’s why I’d never co-sign for someone. if they don’t pay it, I’m stuck with it. I paid and still paying for my education. Make your kid take responsiblity for themselves. if they still live at home make them pay rent and apply it to the loan.

    • StevenR

      He is right… Maybe not morally, but.. there is nothing you can do about it.

    • Fred

      That’s gratitude for you! You signed and now you are stuck…never cosign a loan for ANYONE for any reason…period!!!

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  • tapfumam

    Very good advice but i just wanted to share my frustration. I just started paying off my student loans after graduating in December 2012. I decided i would pay my load bi-weekly while taking advantage of the 0.25% relief via automatic deductions, but my shock was that they did not have that option and that i would have to do it myself and if i chose to do it i can only do it via Bill Pay through my. The kicker was that they don’t want you to do that so they take the 0.25% option off.

    Big question is Which option gives makes paying off the loan quicker ?

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  • Another Ben

    .25% interest rate reduction for automatic payments is ok, but it is better if you create a system, based on your pay schedule, that allows you to pay your loans days or weeks before the due date. That way, the interest doesn’t accrue for as many days before you make the payment and you can save more money than you could by simply reducing your rate by a quarter point and letting interest accrue for the full time between due dates. Some lenders may let you set up automatic payments for the reduced interest rate *and* let you play early, but it was not an option for me. i.e. – if i got the lower rate, i could only pay when they let me.

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