Beating High Student Loan Interest
If you are simply paying the minimum on your student loans month after month, you may fall victim to negative amortization—where your monthly payment doesn't even cover the accumulating interest, causing your balance to grow over time.
Here are the top 5 student loan payoff strategies to preserve your cash flow and hit debt-free status faster:
- 1. Enroll in the SAVE Plan: The income-driven plan that caps payments at 5% of discretionary income and waives unpaid monthly interest growth.
- 2. The Debt Avalanche Method: Paying the minimums on all loans, then routing all extra cash to the loan with the highest interest rate first.
- 3. Employer Assistance Programs: Negotiating with your employer to leverage the tax-free $5,250 annual direct payment benefit.
- 4. Auto-Pay Interest discount: Most federal and private lenders offer a 0.25% APR discount simply for setting up automated payments.
- 5. Refinancing Private Loans: In a low-rate market, refinancing high-interest private student loans to lock in a lower fixed APR.
Try the Live Top 5 Student Loan Repayment Strategies to Avoid Interest Traps
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