It is not fun to pay off student loan debt. We all dread the day we have to take a huge amount of money from our pay to clear the loan. It is an awful feeling. This feeling is unending with the student loans stuck on our backs. However, paying off student loans is not necessarily supposed to be a dreary feeling. There are different strategies that have been employed to help us clear off the loan. Therefore, it is important that you upgrade your payment strategy to ease the process. This article is aimed at illustrating the different strategies we can employ to pay our loans faster. Below are some of those strategies
Government repayment plan
Normally, the republic is the source of student loan finances. Therefore, there are various federal repayment plans that have been stipulated to help you pay off your student loans. Unemployment is rampant and many graduates have fallen into its unbearable trap. These has led to the increase student debt. Government have set aside grants to assist you to clear off your debt. Such government grants are crucial is easing the pain of inability to clear student loans. Each state has a loan repayment program and you can easily access it. These kind of federal programs are also used to encourage or sway students to work in the sectors such as health and engineering.
Income driven repayment plan
This strategy is crucial if your student loans are higher than your monthly salary. Income driven repayment plan is the best option to students who just graduated. This is because such graduates struggle to make enough money to meet their monthly needs. This strategy allows you to draft a repayment plan basing on our current income. Similarly, it considers the size of your family. The following are some of income driven repayment plans;
Pay as you earn
It is one of the commonly used strategies to clear off student loans. This program caps 10% of your monthly income for a certain tabulated amount of time. It is a good strategy for someone with astonishing amount of debt and is struggling, especially when compared to the standard strategy. It is also efficient if your monthly salary is less in comparison to your student debt and our monthly expenses.
Income contingent repayment
Income contingent repayment strategy is also depended on the income of the graduate. The amount of loan you will be paying off regularly, say monthly, is tabulated basing on your current income level. This program is only recommended for graduates.
Student debts are at a crisis level. However, the question is, what is a graduate supposed to do? It is difficult to get a job in the current economy. Many people have been able to defer their loan repayments for a while but it is a short term solution. Interest rates grow every day and therefore, they are required to even pay more. There are other ways you can use to pay off your student loan debt such s considering our current budget and borrowing loans with a low interest rates.