How to Get Rid of School Loan Debt

A college education can help you secure a better job and a brighter financial future, but it can also leave you with a lot of school loans to repay. There are methods of consolidation and repayment that make it feasible to get rid of school loans. It's important to know how to get rid of school loan debt so you can pay back what you owe with a minimum of stress and extra fees.


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    Know your loans.
    • There are several types of school loans and each type has different repayment requirements. You will have a better understanding of the best way to pay off school loan debt if you learn what kinds of loans you have and what is required for repayment. Learn how interest rates vary with subsidized and unsubsidized loans and what your payment options are for each type.
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    Talk to your banker.
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    Work with a loan representative at your local bank or a school loan specialist to determine the best way for you to handle school loan debt. The loan representative can make suggestions for how to handle your money and repayment options so you can meet your repayment requirements while still meeting all of your other financial obligations.
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    Consolidate loans.
    • Consolidate all your school loans into one amount before you start repaying school loan debt. Consolidation sometimes lowers the monthly payment amount required and could reduce your interest rate. Consolidation also makes paying back school loans easier by allowing you to just make one payment instead of separate payments for each loan.
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    Pay as much as you can.
    • You will be required to pay a minimum amount monthly on school loans, but this is often just a payment toward accrued interest and doesn't help you reduce the principal balance owed by much. Pay as much as you can afford each month. The more you pay over the minimum amount, the faster the debt will be repaid and the less accrued interest you'll have to pay.
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    Make regular payments.
    • Pay your school loan payments on time every month even if you can only afford to make the minimum payments. Late or missed payments will result in fees being added to your balance and nonpayments could cause the loan to default. If you can't make a payment, contact your loan holder immediately to arrange for a deferral or payment arrangement.
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    Avoid big purchases.
    • Regulate your other areas of spending to allow yourself to pay more toward your school loans and get rid of school loan debt faster. Drive your current car for a few more years before buying a new one, stick to basic phone and cable services and restrict your leisure spending by giving yourself a monthly allowance.
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    Review payment options periodically.
    • There are options allowing you to pay a certain percentage of your balance owed or to extend your repayment of a school loan over a certain number of years. The right option for you could change as your job status or financial situation changes, so look into repayment options periodically to ensure you're still using the right one.

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Categories: Budgeting and Financial Aid for College