Here’s how paying off your student loans can be a little less painless

Jennifer McClelland | RSS | Sun, Jul 12 2009 | 7 Comments

Paying back your student loans can be a pain in the you know what. Here are a few tips to help ease the process along and help you prosper in the end.

Deduct the interest you pay - You can get a tax break on all that interest you pay – up to $2,500 a year.

Know any benefits you get from your job – If you’re teaching at an inner city school you could end up getting up to $5,000 taken off the amount you owe to you Stafford Loans. You don’t have to pay more than you have to so do some homework before you start paying your loans.

Consolidate! – When it comes to student loans, it is wise to put all your loans in one big loan, as opposed to credit cards where it isn’t considered very prudent to do the same. If you consolidate your loans, you end up being covered if rates go up. However, if rates go down you could end up paying more because of the locked in rate you have. You can ask your lender what is the best option for you.

You need to be aware of your repayment options. – To do this, you need to know exactly how much you owe on your loans. You can check this at the United States Department of Education’s National Student Loan Data System. Once you get the final number, you can talk to your lender about payment options an pick the one that fits the best in with your financial goals.

Know how much you will have to pay each month. – So you’re finally out of college and have that diploma in hand. Right now, in your deferment period, you might not know how much you’re going to end up owing per month, but you should. Interest will cost you more than the amount you borrowed, but paying the loan off faster will help offset some of that cost. If you pay the minimum amount each month, then you’re going to end up being a lot less wealthy in the long run. Then again, if you pay the minimum and put the difference you would have paid in a savings plan with a higher interest rate than your loans, you could end up ahead when you pay off the loan.

You can ask to have your interest rate lowered. – Ask and sometimes, you will receive. This works with some loans and credit cards; if you ask for a lower interest rate, sometimes lenders feel generous and give it to you. It never hurts to ask.

If you can avoid it, don’t ever file for bankruptcy. - Declaring bankruptcy may be able to get you out of credit card debt and past due bills, but it won’t get you out of student loan debt.

Related posts:
You Should Not Walk Away From Your Student Loans
Student debt is on the rise
What are the lies that got you into credit card debt?

Tags: interest rate, national student loan, tax break