As we’re half-way through 2018, let’s kick off a new plan to pay off all your student loan debts. Although this might seem to be a simple task but it is easier said than done. Can you imagine how incredible it would feel to become debt free by the beginning of the next year? Nowadays, all of us have enough stress in our lives and student loan debt adds fuel to the fire. In fact, as per recent statistics, debt has become the ultimate source of financial stress for all millennials. If you’re someone who is hell-bent to make 2018 the year to eliminate all your student loans, you have to take into account the best strategies.
But what are the strategies that you should follow in order to pay off your debts? We have compiled a list of the best techniques that you can follow to bid goodbye to student loan debt.
1: The debt snowball can be used to gain momentum
If you seem to be in love with small wins, the debt snowball could definitely be an ideal strategy. All you have to do is line up all the debts, from the lowest debt amount to the highest. In case the student loans are grouped together, you can check the accounts to know who receives how much. Next you should add minimum payments on each of the loan to check whether or not you can afford more. Once the lowest balance is repaid, add the amount that you were paying to each minimum payment. Repeat the process until the loans are paid off.
2: Win your calculations with the debt avalanche method
Do you wish to pay off your debt even faster? If answered yes, you can choose the debt avalanche method. Here you have to pay back the loan with the highest interest rate first and then proceed towards the lowest. When you target according to the interest rate, you can pay off more from your expensive debt load. However, the only issue is that when the loan with the highest rate also carries the highest balance. In such a case, you may take longer to repay this amount.
3: Add bits of snowflake to the mixture
With the debt snowflake, you can use the avalanche and snowball to its utmost. There are few experts who recommend amalgamating the method with the snowball, targeting the account with the lowest balance first. If you consider the other strategies, the extra payments should be done towards the other debts apart from the minimum payments.
4: Opt for student loan refinancing
Do you wish to decrease the student loan repayment time in a drastic manner? If yes, you could go for student loan refinance to alter the terms and conditions of the student loan. The interest rates will be lowered and the term will also be extended as per your affordability.
Henceforth, whenever you’re drowning in student loan debt, make sure you take the above listed steps to bid goodbye to student loan obligations.