Every loan has a due date each month, which is when most people opt to make their payment.
However, to pay student loans you don’t need to be restricted to paying on the same day each month. You can customize your loan payment plan to match what works best for you.
Here are five different ways you can pay student loans.
1. The Default: Pay Student Loans Monthly
By default, you will make a payment once per month on the date your loan servicer decides. Not a whole lot of thought goes into picking that date. Sometimes it’s even decided by a computer.
If your loan payment is due at an inconvenient time each month, you can call your servicer and ask them to move your payment to another date. However, your loan will still be due on the same day each month, which isn’t ideal for many of us.
2. Shift Your Payment Date
If you are in a position to make a full extra payment or two, you can get ahead on your loan and push your next due date out into the future. Not all lenders allow this, but when I was paying Great Lakes it was a viable option.
Once I was a few months ahead on my loans, I didn’t have to pay for months. But I wasn’t going to let that interest accumulate while waiting to make another payment. I wanted my loans paid off early.
Since no payment was due for months, I could make a monthly payment any day of the month I wanted without penalty.
3. Split Your Payment into Multiple Parts
Let’s say your student loan payment each month is $500. Did you know you don’t have to pay the whole $500 at once? You can split your payment into multiple payments, as long as the total is $500.
Most people don’t get paid once per month, so looking to pay student loans monthly might not make sense. Instead, you can pay $250 every payday. If you are paid twice each month (24 paydays per year), you will still be paying the same $500 per month. It’s just broken up so the timing of your student loan payment matches the timing of your income.
If you are paid every other week (26 paydays per year), you would make the same $500 minimum each month. But two months each year you are also making a bonus payment. That’s the same as making a full extra payment each year. And since you’re used to paying student loans every payday, it doesn’t feel like you are spending more.
Paying a little extra with 26 paydays can shave months off of your student loans, or years if you are paying a little extra. It’s all about lining up your student loan payments with your paydays.
4. Pay a Little Extra Every Payday
If paying every payday sounds good to you, you can set up automatic payments so you don’t even have to think about it. But if you want to pay off your loans even sooner, consider adding a little extra to your bi-weekly payment.
When I had to pay student loans, I made a payment every payday and regularly increased that amount. I started paying half of my payment twice each month but then realized that adding an extra $10 on top would cut an extra few months off of my loans. Then I increased it to $20 extra each payday, then $40, then $50.
Eventually, I was making a full payment each payday. That was the equivalent of making 26 full student loan payments each year, instead of the scheduled 12 payments.
While everyone doesn’t have the ability to make the equivalent of 26 payments each year, if you focus on your budget and work hard to maximize your income, you can probably afford to add just a little extra. Maybe even $5 or $10 per payment. It all adds up!
This is part of the strategy I used to pay off my $40,000 student loans two years after graduation.
5. Find the Right Payment Schedule for Your Needs
Maybe you are paid monthly, and monthly payments make the most sense. Perhaps you are paid weekly, so a smaller payment every Friday works for you. Or, you are a freelancer with irregular income, and making large payments less frequently is your best option.
Working to pay student loans is never fun, but you can make a game of paying your loans off as quickly as possible. You can change your payment plan anytime as long as you meet the minimum, so test out different strategies to see what works best for you.
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