How to Quickly Pay Off Your Student Loans

Frequently students graduate with significant loan debt. This leaves students with no choice but to pay it if they want to move forward in life with a good job. However, one can take some smart steps to pay off student loans even faster. Naturally, this challenge is easier said than done, but here are some tips on how to do so.

Making the Most Out of One’s Income

If working, take advantage of any opportunity for extra money. When getting a raise at work or winning the lottery, use that money to quickly pay down the student loan.

Alternatively, consider refinancing loans to pay them off faster. Refinancing student loans can help shave years off the repayment period. And while it may seem counterintuitive, refinancing can help people struggling to make their monthly payments. By taking out a new loan at an interest rate that’s lower than what one has been paying previously, one will end up saving money over time — and be able to pay off the old loans sooner as a result.

Research Loan Forgiveness or Cancellation Programs

If one qualifies for a student loan forgiveness program or cancellation program, this is a great option that could benefit the person substantially. To be eligible for these programs, someone has to be working in specific areas such as teaching or nursing.

These programs often require a person to meet specific requirements, such as making particular payments over a specific time before considering forgiving all remaining debt. These programs can help people get out of their student debt.

Tackling the Small Stuff

Before doing anything else, a person should be on the right repayment plan for their situation. The standard repayment plan does not always result in the fastest payoff and sometimes even results in a higher total amount paid due to interest accruing over time. Look into an income-driven repayment plan, which will cap your monthly payments at a percentage of what a person earns, depending on one’s financial situation.

Pay the Highest Interest Rate Loans First

When trying to determine which student loans to pay off first, it makes sense to focus on the one with the highest interest rate first. A person is likely to save money by paying off this loan first and then using that money towards another loan with the next highest interest rate and so on until all of the loans are paid off. This is an excellent way for those with multiple loans to pay them off quickly.

This blog/website is only made available for educational purposes. It is designed to give visitors general information and a general understanding of select financial topics. It is not intended to provide specific financial or investment advice. Conduct your own due diligence or consult a licensed financial advisor/broker before making any and all financial/investment decisions.

About Saagar Gupta

Saagar Gupta is the founding partner and fund manager of SG3 Capital, a private investment firm located in Puerto Rico. Since inception in 2015, SG3 Capital has focused on taking a proactive approach to asset management. One of the firm’s greatest strengths is its ability to form strategic partnerships with other firms and individuals who share a passion for finance and helping others achieve their financial goals.

After graduating from high school in Oakland, California, Saagar Gupta got his first exposure to finance at the hedge fund Ascend Capital as an intern. Although he had already enrolled at the Massachusetts Institute of Technology (MIT), Saagar loved the experience so much that he briefly considered skipping MIT and working at the hedge fund full-time. After graduating from MIT with a degree in Electrical Engineering and Computer Science, Saagar worked at Susquehanna International Group where he learned a lot about the finance industry and how to effectively manage capital. In 2010, Saagar moved from Philadelphia to New York City to become a quantitative trader at HAP Capital. After about four years at HAP Capital, Saagar decided to spend a few months travelling to Europe with his young but growing family. He had several new opportunities he was considering, but the idea to start SG3 Capital came to him while he was in a small town in Italy, and the freedom of working for himself has been life-changing.