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Student Loan Payback Methods & Strategies

September 8, 2011

Student Loan Payback

student loan payback

This article deals with both the different student loan payback methods as well as methods that can help you payback your student loans FAST. First off repayment methods:

There are usually 4 student loan payback methods that one has available to them when they are just starting to pay off their loans. These 4 options are:

  •  The standard option in which your payment is the same each month and usually lasts for 10 years.
  • Extended student loan payback is the second where you can get your repayment period extended from the normal 10 year to anywhere from 12 to 25 years, which comes with lower payments, but more interest in the long run.
  • Graduated repayment is the third option where payments start low and increase usually every two years,
  • Income Contigent is the next student loan payback method and your monthly payment is based of usually 15 percent of your monthly income.

Fast Student Loan Payback Methods

Now that we have covered the different repayment methods, we can move into the student loan payback methods that can equate to you getting your loan paid off in record time. Here are a few methods to get debt knocked out quick:

  • Saving For Retirement - This may sound weird, but saving for retirement is an excellent student loan payback method. By saving money for retirement, it is considered tax deductable, so at the end of the year, you will get money back just by saving for retirement, which you can use to pay off your loan debt. You can also take out the retirement funds and use them to pay your debt off as well. This student loan payback method is knocking out two birds with one stone.
  • Keep Living Like A Student – Since you have just graduated, you are used to living like a student, budget shopping and penny pinching. You should keep doing this, but now that you have a good paying job, unlike in college, you can save the money that you saved on budgeting, and use it to pay your loan debt.
  • Choose the Shortest Repyament Period – By choosing the shortest repayment period, you will pay your loan off in single digit amount of years instead of double didgits. Although payments will be higher, they will get you paid off faster as well as save you a lot of money in what you would have paid in interest if you would have choosen a longer repayment period.
  • Student Loan Forgiveness – This student loan payback method has been used by millions and can get out out of debt fast. These programs are offered by having your work public service jobs or volunteer work where they either will pay a percentage off your loan each year that you provide your service, usually 15 to 20 perent each year, or you work for a specific amount of time in these jobs, usually 5 to 10, and after you are finished, your loan debt is totally wiped clean.
  • Ask Your Employer To Help – This last student loan payback method can get you out of debt fast as well. Employers want to keep their employees as it is expesive to keep hiring new ones. You can ask them to help you by agreeing to work a specific amount of years with them. You also try a possible percentage off each year of work.