Debt Advice: Tips For Paying Off Student Loans

You can pay off your student loans quickly and easily if you look at options such as loan forgiveness, loan consolidation and extra principal payments.

Having thousands of dollars of student loans hanging over your head can have many negative consequences. Your student loans may make it more difficult for you to qualify for a car loan, get a mortgage or take a great job that pays less money. If you fail to pay your student loans on time, your credit rating will probably suffer. This means that you may have trouble getting a job or paying reasonable rates for auto, home or other types of insurance. It also means that you may not be approved for other types of credit, or that you may pay higher rates if you can get approved. Fortunately, there are some quick and easy steps that you can take to pay off those student loans in no time.

Loan Forgiveness

One option for paying off your student loans quickly is to see if you are eligible for some form of loan forgiveness. There are many ways to become eligible for loan forgiveness. You could volunteer for Americorps or Peace Corps. If you are a teacher, you could teach in a school district that would qualify you to have all or some portion of your student loans forgiven. Serving in the military may help you qualify for loan forgiveness. There are also governmental agencies that will pay for part of your student loans if you work for them.

So check with your current employer, and do some searching on the internet. You may find that the easiest way to pay off your student loans is to have someone else do it. It may even be worth it to take a different job, even one that pays a little less, if it means that you can be rid of your student loans forever. Compare the pay and benefits that you receive from your current employer to the pay, benefits and loan forgiveness that you could receive from another employer. You could be surprised at the results.

Consolidate Your Loans

If you have never consolidated your student loans, you should consider doing so. You only get one chance to consolidate, so if you have consolidated before, you are out of luck. Rates for consolidation loans are at record lows, so this is a great time to act. If your student loans are all with one lender, you are required to consolidate with that lender. If you have student loans with multiple lenders, you have more options. A great resource for information is the Federal Direct Consolidation Information Center at You can also do a general search on the internet for "student loan consolidation."

As you compare the various lenders, keep in mind that they all charge the same interest rates for the consolidation loans. Where they vary is in the discounts or rebates that they provide for such things as electing to pay your loans electronically or for making a specified number of consecutive timely payments. Also keep in mind that extending the repayment period for your student loans is not always a good idea. If you are currently having trouble making your payments, a lower monthly payment may help you keep current. However, you will end up paying more interest in the long run.

Carefully weigh the benefits of a longer loan term before you accept one. If you aren't sure if you can consistently make the higher payments that a shorter loan term will require, consider accepting the longer loan term and making higher payments than required every month. You'll be happy you did so when you make that final payment.

Make Additional Principal Payments

If your student loans are at the best possible interest rate that you can obtain and you have exhausted any loan forgiveness options, your next step is to make additional principal payments. Take a close look at what you are spending every month. Are there some areas where you could easily cut back? Could you take your lunch to work one or two days per week? Perhaps you could eat out a little less frequently or do so at less expensive restaurants. Remember that these changes are not really sacrifices. Instead, they are positive steps that will speed you on your way to financial freedom.

Take the extra money that you can save every month and send it in with your regular student loan payment. If you send in a payment stub, make sure to designate the additional amount as an extra "principal payment" rather than an extra monthly payment. If you want to know how additional principal payments will speed up your loan payoff date, look at a loan calculator like the one offered at under "calculators." You'll be able to see just how quickly you can pay off your loans with the extra amounts that you'll be sending in.

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