If there is one thing that keeps college graduates from saving and investing their money, it is the burden of college loans. According to analysis from credit bureau Experian, 40 million Americans have an outstanding student loan with the average balance looming at $29,000. This kind of debt can weigh graduates down and keep them from seizing new opportunities until that debt is cleared.
So how can you get rid of that debt quickly? Raccoon Valley Bank has some tips to help you repay your college loans fast!
Treat your loan like a mortgage
If you can afford it, make larger payments to reduce the principal quickly and pay less in interest charges. Another strategy you can use is adding payments by sending in checks every two weeks rather than once a month.
Make a 5 year plan
Figuring out exactly when a loan ends is comforting for many people and can help you set a goal to commit to. Sending in payments becomes part of your monthly routine just like paying for a mortgage, cable and cell phone bills.
Establish a college repayment fund
If you can save an extra $100 or $200 a month and automatically deposit it into a savings account, you will be able to pay off your debt faster. Depositing money automatically forces you to save what you may otherwise be tempted to spend. It is also important that you set up the account only to pay back your college debt, not other expenses.
If you are still attending college, you have an opportunity to be proactive and keep your college debt in check. Working a part time job while in college will provide you with real-world experience and earn income that will help lower future debt obligations.
It can be easy to lose sight of your financial future when you start getting a bigger paycheck. Don’t fall into the trap of instant gratification. The most effective way to manage your college debt is to plan ahead and make some sacrifices in order to prepare for the future.
Those who succeed at paying off their college debts quickly are those who live within their means and are mindful about saving. Raccoon Valley Bank wants to help you prepare for the future and get out from under your debt as quickly as possible. Contact us about setting up savings accounts, checking accounts and other financial tools.