Private student loans are taken as a second option by borrowers as there is less flexibility in repayment options. However, if you have taken a private student loan, gear up to start repaying the loan.
Many foreign students have to opt for private student loans but are unable to find a co-signer in a stranger’s land. Is there any way to get the loan without a co-signer? Yes, there are plenty of options to choose from. Read more about it.
Here are amazing student hacks to repay your private student loan:
#1. Sign Up for Auto-Debit to Get Low-Interest Loan:
Auto debit is a convenient method of making private student loan payments. Enrolling in auto debit means you are selecting to pay ‘Current Amount Due’, that is, the due amount to be paid by bank automatically at the end of each month until the total cost has been repaid. However, you can opt for paying more than the minimum amount or pay earlier than the due date. Both these options have added benefits for you.
Auto debit eases your trouble in remembering the due dates of each loan you have taken. Moreover, you can get a 0.25 % interest rate reduction on the principal amount.
#2. Build Good Credit to Save Money:
Make on-time payments of tuition fees and student loans to build a good credit. It will save your money from fine incurred on late fees. Moreover, the money lender may provide flexible options for loan repayment later on due to your good credit. In case of a low budget, the lender may allow deferment in loan repayment or forbearance of loan amount after graduation.
#3. Seek out Private Loan Modification Programs:
If you are unable to make monthly repayments of student loan amount, you can look for modification programs to make slight changes to the amount due each month. Almost everyone having private loans is eligible to apply for modification programs that are offered by almost every student loan companies. Modification programs can help you reduce the interest rates and extend the time period of loan repayment. This is of assistance when you are having financial problems.
#4. Repay Loan Twice a Month:
Always repay the interest based payments first to prevent the heaping amount of interest on a small principal loan amount. This tip will help you save a lot of money that you will otherwise spend on interest repayment.
Did you know that interest rate increases on daily basis rather than on a monthly or annual basis? Make loan repayment twice a month, that is, in two halves. It will save you from the interest rate that would otherwise have been incurred on half the amount by the end of every month. Moreover, if you are a spend-thrift, this method of repayment will keep you from spending more than you can afford. You will make payments as soon as you get the money. The upcoming due date will keep you working throughout the month to earn the due amount after every 15 days.
#5. Keep the Records:
If you forget the remaining loan amount every now and then, get the credit report records printed from the National Student Loan Data System to budget your money every month. The details of remaining balance amount and accruing interest rate should be kept in check. It will help you stay on track and find some ways out of the high incurring interest rates.
#6. Consolidate for Low-Interest Rates:
Before borrowing money, compare various private student loan lenders based on their interest rates and repayment options. Whatever is less costly; go for it without thinking for a moment. You can also find ways to lower down the interest rates. Another way to save money is that you can consolidate all your private student loans to get low-interest rates and, therefore, get an affordable amount due every month.
#7. Get Annual Tax Deduction on Interest Rates:
Whether you have taken a federal loan or a private loan, you are eligible for interest rate deduction on your student loan. You can get an interest rate tax deduction on the principal amount by up to $2, 500.
#8. Earn Extra Income from Side Jobs:
If you do not have a high paying job, you can take part-time job tasks to earn a little more than regular income. It will alleviate your stress of heaping interest on the principal loan amount.
If the private loan repayment amount is higher than your annual income after graduation, you can opt for side jobs to repay the loan amount as soon as possible. Do not defer payments during the grace period as the interest rate is still being incurred on the remaining loan amount. To save money, it is better to lessen the burden before it’s too late.