Accruing debt as a result of borrowing from banks, Federal student aid, family, or any other method of obtaining funds with which to go to school is a process that is often necessary for those who wish to further education and career opportunities.
When the time comes to repay you student loan, there are tips and strategies out there that can help you to manage your debt and your finances.
Refinance Your Student Loan
It is often easier to get a lower interest rate after college when you have built up some good credit. Once you have been building up your credit score for some time, you do have the option to refinance your loan to lower your interest rate and payments.
Be cautious about this option, however, because going from a Federal loan to a private lender may cause you to lose some of your forbearance options that you have available with your Federal loan.
Setup Automatic Monthly Payments
Contact your loan provider and ask if you can setup monthly payments from your bank account. This will help you out in a couple of ways. First, the convenience factor of never having to worry about being late on your monthly student loan payment is beneficial to you because you don’t have to worry about increased interest. Second, some companies will give you reductions on your principal if you sign up to automatic payments.
You will generally be asked to provide you bank routing number along with your account number. The great thing is there is no added fee for this convenience and you can also choose what day of the month you want you auto-pay to be drafted from your account.
Gain Assistance By Serving
Serving your community can be a great way to help repay or pay down your student loan debt. For example, did you know that if you serve as full time volunteer for 12 months, you can earn up to two Segal AmeriCorps Education Awards?
The Segal AmeriCorps Education Awards offers the equivalent of the maximum US Federal Pell Grant maximum, which for year 2016-2017 is $5,815.00. This can be a great way to reduce your principal and interest. And, since you are allowed to earn two education awards, this will be close to $12,000.00 deducted from the amount you owe.
There are many other programs out there that can help you reduce your payments that are similar to Segal AmeriCorps. Do a search for these types of volunteer programs, as you can only benefit from serving the community as well as reducing student loans.