5 Tips on How to Repay Your Student Loan

Going to college is mandatory if you are to be successful in the current society. Without a college education, getting a good job may be tougher than normal. However, while some parents are able to afford college tuition for their children easily, some do not have this luxury while others simply prefer that their children take a loan to finance higher education.

Now, in doing so, students can access two types of loans which include private and federal loans. In most cases, private loans are offered at floating/variable rates while the federal loan program has a fixed rate. Regardless of what option you opt for, you will need to repay your loan after graduation. Here are a few tips on how to get rid of the liability as soon as possible.

Increased monthly payments

One of the best ways of repaying your college loan is to make sure that you make timely monthly payments. Failing to do so could accrue some unnecessary fees which end up eating on your paycheck. However, you can even do better by increasing your monthly loan repayment amount as long as you have the ability to do so.

Increased monthly payments will ultimately lead to the earlier completion of college loan repayment thereby cutting on interest expense. Remember the longer you take to complete your college loan repayment, the more interest you are likely to pay.

Make biweekly payments instead of monthly payments

Increasing the frequency of payments may not appear to yield any benefits at first, but by the end of the year, you will have made an extra month worth of college loan repayments. A calendar year has 52 weeks, which means making college loan repayments every other week will lead to 26 payments at the end of the year.

Generally, 24 biweekly payments will be enough to cover for 12 monthly payments. This means you will have made two extra biweekly payments at the end of the calendar year. If your college loan has a 10-year maturity period, then you could end up completing your loan repayments 10 months earlier thereby saving on interest expense.

Pay while you study

Many students forget that even while studying, they can spare a lot of time to work a side job. Today, several companies are hiring freelance workers to operate on a part-time basis. It would be naïve to just sit on that debt through the entire academic period without working on a side job to cut a good chunk of it by the time you graduate.

If you could work for 5-10 hours per week making an hourly wage of about $10-$15, then you would be in a position to offset $100 worth of college loan debt every month. This means that if you took a $10,000 loan, then you could easily service at least a quarter of it while still in college. Again, early completion of loan repayment leads to savings on interest expense.

Convince your employer to pay it off

Many midsized to small employers may not be able to provide this option. However, those that have the ability can take advantage of this to save on future salary payments. You as the graduate, on the other hand, must be ready to raise the matter during salary negotiations at the interviews.

Ideally, every employer will have their own terms attached to this kind of offer including requirements such as working for the company for a particular period of time, failure to which, you may have to repay the money when you decide to leave the organization.

Nonetheless, this option gives the graduate an opportunity to focus on the job at hand rather than being concerned with debt issues. This also means that you settle for a lower salary than what your position mandates based on your employer’s payroll.

Automated deductions

It is more painful when you actually have to go to the bank to make a loan repayment deposit as compared to when the payments are automated. This is money that is getting out of your pocket whose benefits you’ve already utilized some months or years ago. Therefore, signing up for auto-deductions makes things simpler and less painful.

In addition, loan repayments via an auto-deductions platform attract a slightly lower interest rate, which ranges from 0.25%. This means that making payments via such a platform would easily end up cutting 8-12 months from your loan repayment period. Again, this means that you save more on interest expense.


Some people argue that cutting your interest expense by completing loan repayments early may have an adverse effect on your tax deductions. While this is true, the level of savings achieved by completing payments earlier cannot be compared to the level of savings achieved by adding interest expense as a tax deductible item when filing for personal tax.

The bottom line is that the earlier you complete repaying you college loan, the earlier you are likely to focus on putting your finances on income generating assets or paying for a mortgage.


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