Student loan debt can feel like a financial ball and chain. It eats away at your hard-earned dollars and holds you back from accomplishing your goals. So if you’re looking to ditch your debt for good, there are simple steps you can take to pay off your student loans faster.
The Student Loan Hero team chatted with Jack Zoeller, Founder & CEO of CordiaGrad, to learn some of his best tips for getting rid of student loans fast.
What Is CordiaGrad?
Zoeller was compelled to found CordiaGrad, a student loan refinancing company, after realizing how indebted young people are today.
“I saw the magnitude of the student debt problem and thought, we can’t wait for the federal government or big banks to try to solve this — and let a whole generation be repaying their student loans into their 50s. So I launched CordiaGrad” he said.
Read on for Zoeller’s expert advice on how to conquer your student loans in five simple steps.
Step 1: Know what you owe
The first step you should take if you want to pay off your student loans quickly is to find out exactly what you owe.
“Start with making sure you know the amount and interest rate on each loan,” explained Zoeller. “Make a list of goals for the next six to 12 months — use whatever funds you can afford to pay down the principal balances of your debts that have the highest rates first.”
Step 2: Make more than the minimum payment
Minimum payments are just that — the very minimum. Making substantial progress on your student loan debt is tough when you’re only making minimum payments.
If at all possible, make a dent in your student loan balance by putting more toward your debt each month. According to Zoeller, “Borrowers can also speed up their repayments by sending in larger-than-scheduled monthly payments from time to time.”
Step 3: Lower your interest rates
One way to get ahead on student loan payments and pay them off faster is by getting a lower interest rate through refinancing.
“Refinancing is a way to proactively lower your interest rate and get a more favorable monthly payment or length of term,” said Zoeller. He explained that refinancing involves paying off your student loans from the government and/or private lenders, then using the proceeds to fund a new, single loan from a different private lender such as CordiaGrad.
Lowering your interest rate could save you thousands of dollars over the life of your loan, especially if you have pesky Graduate PLUS loans, which could run as high as 7.9%.
“Our borrowers lower their student loan interest rates by 2%, on average,” said Zoeller.
Plus, most refinancing lenders (including CordiaGrad) don’t charge prepayment penalties. “You can pay more than your scheduled monthly payment, as often as you choose, to get out of debt faster,” he added.
If you’re interested in refinancing your student loans, check out the eligibility requirements from various lenders first, as well as your credit score, which might be a determining factor in whether you are approved or not.
Note that CordiaGrad uniquely allows married couples to refinance their debt together, with the interest rate determined according to the higher of the two credit scores.
Step 4: Sign up for auto-pay
Zoeller also advised borrowers to “Use auto-pay so you never miss a payment.” Auto-pay allows your student loan payments to be automatically deducted from your bank account each month, so you never have to worry about remembering to mail a check.
Most servicers offer a 0.25% interest rate deduction for signing up, as well. In fact, CordiaGrad will shave off an additional 0.50% from your interest rate if you sign up for auto-pay and make payments from a CordiaGrad checking account.
Step 5: Research loan forgiveness options
If you’re working in the public sector and have federal student loans, you may be eligible for Public Service Loan Forgiveness.
“Any borrower who is employed in a qualifying nonprofit should consider remaining in their federal loans, even if they are at a higher interest rate,” advised Zoeller. If you have a very large loan balance, holding out for forgiveness could help you eliminate that debt sooner than if you tried to pay it all off on your own.
Not sure if you qualify? Check out our guide to eight career fields that offer student loan forgiveness.
Student loan debt can be a drag, but these five steps can help you toward eliminating your debt sooner rather than later.
“Paying down your student debt faster than scheduled will free up cash that may be needed later to meet life’s other priorities,” said Zoeller.
And he’s right — by paying off your student loans now, you can cut down on interest and free up money for other things, such as retirement, travel, and more. So don’t wait!
Thank you Jack and CordiaGrad for sharing your expertise.
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