Even though they can be a helpful tool for paying for education in the US, student loans can pose a significant financial burden once you’ve graduated. There are strategies to pay off student loans faster if you’re ready to stop making the monthly payments.
If you can pay off your student loans earlier than expected, it can be worth it in the end to make the sacrifices necessary to accelerate your debt payback. In this article, we look at practical ways to pay off your student loan as an international student.
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How to pay off student loans fast
Here are some methods that may be useful if you’re an international student asking how to pay off student loans quickly:
1. Take out a reduced interest rate refinance.
You can think about refinancing your international student loans with a US-based lender if you want to pay them off more quickly. You can get a better interest rate if you refinance your student loan debt.
Additionally, you may have more money to contribute toward your refinanced debt since you will be paying less in interest. You probably won’t have to worry about accruing prepayment fees either, as many refinance lenders in the United States do not impose them.
Additionally, in certain circumstances, some lenders provide an extra rate reduction. For example, MPOWER Financing offers a 0.25% rate cut if you put your refinanced student loan on autopay.
In the process of working toward a quicker loan payback, you may be able to lower your interest rate by following these steps as much as possible.
2. Pay over the required minimum amount.
Typically, when you take out a student loan, you commit to repaying it over a predetermined number of years with fixed monthly installments. However, you can shorten your repayment period by months or even years if you pay more than the minimum amount owed each month.
As an illustration, let’s say you borrowed $35,000 at a 10.00% interest rate. You may pay off the loan in ten years if you make a monthly payment of $463. However, you may pay off your debt a year and a half sooner and avoid paying over $3,500 in interest if you can increase your monthly payment to $513 ($50 extra per month). You may pay off your loan faster—two years and eight months—and save over $6,000 in interest if you can afford to pay $563 a month.
It can be important to get in touch with your loan servicer before arranging your additional installments to ensure that the payments are being applied appropriately. Make sure your payments are applied to your principal debt and not kept as savings for unpaid bills.
3. Get a job to help with school loans.
Some businesses provide benefits to their staff that include help with student loans. For instance, Google will match employee annual student loan payments up to a maximum of $2,500. Additionally, Nvidia, a tech corporation, would reimburse student loans up to $6,000 a year, with a cap of $30,000.
If you’re searching for new employment, think about giving a corporation that will assist you in repaying your student loans priority. It should be noted that not all foreign student loans are eligible for this benefit; to be eligible for employer-sponsored student loan help, you may need to refinance your loans with U.S.-based lenders.
4. Make your payments every two weeks.
If you now pay your student loans every month, you might want to consider paying them every two weeks. Put differently, divide your monthly expenses in half and make a payment every two weeks for that amount. Say you were to pay $150 every two weeks instead of $300 once a month.
The calendar will still require you to pay the same amount each month, but you will wind up having to make an additional payment every year. You can easily reduce your debt faster and with a little more work on your part by paying off your student loans on a biweekly basis.
5. Take up a side project or ask for a raise.
It will be challenging to make additional student loan payments if your budget is tight. Look for methods to raise your income if you’re determined to pay off your debt before the deadline.
You may work a second gig, like driving for a ride-sharing company or doing freelance work online, or you could approach your boss for a raise. You can use the extra money you make if you can raise your income to pay off your student loan debt.
6. Cut back on your living costs.
Think of methods to cut costs in addition to raising your income. Your ability to make additional student loan payments will be aided by making more space in your budget.
Think about moving in with one or more roommates or downsizing to a less expensive place. If you frequently dine out, consider organizing your meals and preparing meals at home. Additionally, think about trading in your car for a less costly one if your car payment is too high.
Examine your monthly spending to find areas where you might make savings. You may accelerate your student loan repayment with an additional $50 or $100 a month.
Do you want to study abroad? Note that obtaining a bachelor’s degree or a master’s degree in this field helps to improve your chances in the labor market. Studying abroad is no joke for international students due to the cost. However, you can achieve your dreams without breaking the bank by applying for student loans, which you can pay for as long as 10 years.
MPower Finance and Prodigy Finance are some of the best student loan providers for international students. They also do not require a cosigner or collateral before an application. Reach out to us today, and let’s help you get started.