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.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|