Getting out of student loan debt can be stressful and feel overwhelming, especially if you’ve taken out multiple loans. However, you can take control of your situation with a plan. Knowing how many loans you have, where you have them, and how much you owe is a great start.
Consider these tips and strategies as you pay off your loans—you’ve got options.
1. Get organizedWrite down all your loan information—lender names and contact info, interest rates, payment dates, balances, and whether or not they’re private or federal—as these may vary for each loan. Being able to see the full picture of your student debt quickly and easily can help you manage everything more effectively.
2. Take advantage of grace periodsSome federal student loans have a brief grace period after graduation when no payments are due. If you’re able, consider making payments during this period to get a jump -start on your balance. Once the grace period ends, you’ll need to start making payments unless you qualify for a deferment related to unemployment or health problems.
3. Make additional payments
There's no penalty for paying your loans early. If you’ve got a little extra money in your budget, consider making an additional payment or a larger monthly payment. However, pay attention to how the overpayment will be applied to the loan—toward interest, principal, or next month’s bill. To help pay down your loans quicker, ask your loan servicer to apply the extra money to your principal balance.
4. Avoid late payments
The most important element credit agencies consider when figuring your credit score is your payment history. Don’t ignore the payment-due letters you receive for student loans or other debt. Building good credit can help you qualify for low-interest loans, secure an apartment, and qualify for a mortgage.
5. Sign up for automatic paymentsSetting up autopay is a great way to avoid late payments and can help you stay on track with your budget. Plus, some loan servicers may offer a discount or incentive when you sign up.
6. Renegotiate your payment planIf you’re in default or having trouble making your minimum payments, call your loan servicer and explain your situation. They might be able to work out a payment plan you can manage. Remember: Try not to miss payments or fall behind, or your credit score could suffer.
7. Research employer benefitsAsk your employer about student loan repayment assistance. Some employers offer a benefit that contributes money to help pay off an employee’s student debt.
8. Consider federal repayment programsSome borrowers will qualify for repayment options like REPAYE (Revised Pay As You Earn), an income-based program that adjusts your payment amount depending on your income—your monthly payment tops out at 10% of your monthly income. Other repayment options let you put your loans on hold while you’re a full-time student or if you run into a hardship, like unemployment.
9. See if you’re eligible for Public Service Loan Forgiveness
Public Service Loan Forgiveness is a federal program created for people in public service jobs. If approved, your federal loan balances are forgiven after 120 qualifying monthly payments. It’s important to note that refinancing to a private loan or missing payments disqualifies you for this program.