So now you know what loans you have. Maybe you consolidated them, may you didn't. Now what do you do? Pay them. Duh. Here's how.
(Disclaimer: If you have just one loan, you're in luck and this post might not help you much. If you happen to have more than one, read on.)
Organize yourself: List out your loans by interest rate: from the highest interest rate to the lowest.
Not all are treated equal: You're going to start with the loan with the highest interest rate. Pay over the minimum payment on the loan with the highest interest rate and pay the minimum payment on everything else. Obviously don't overpay if you can't afford the minimum payment on everything else. Once you're done paying off that loan, move down the list to the next highest interest and so on. The goal is to overpay on the highest interest rates first so you pay less interest in the long term.
Another move to make: Sign up for direct deposit. You can usually get a 0.25% reduction in the interest rate if you sign up for direct deposit, which means that the servicer will automatically take the minimum payment out of your account. Keep in mind if you overpay, most servicers will still take out the minimum regardless. So make sure you double check to make sure that you have the funds in your account for the minimum payment.
Two is better than one: Paying more frequently will reduce the interest built up each month. Instead of making one monthly payment of $300, make 2 payments of $150 a month. BUT (This is a HUGE BUT) if you can sign up for direct deposit, ignore this point, as getting a 0.25% interest rate deduction will probably be more beneficial.
Now let them steal your money! Just kidding... not really. You're one step closer to being debt free.
Cheers!
Ali
(Disclaimer: If you have just one loan, you're in luck and this post might not help you much. If you happen to have more than one, read on.)
Organize yourself: List out your loans by interest rate: from the highest interest rate to the lowest.
Not all are treated equal: You're going to start with the loan with the highest interest rate. Pay over the minimum payment on the loan with the highest interest rate and pay the minimum payment on everything else. Obviously don't overpay if you can't afford the minimum payment on everything else. Once you're done paying off that loan, move down the list to the next highest interest and so on. The goal is to overpay on the highest interest rates first so you pay less interest in the long term.
Another move to make: Sign up for direct deposit. You can usually get a 0.25% reduction in the interest rate if you sign up for direct deposit, which means that the servicer will automatically take the minimum payment out of your account. Keep in mind if you overpay, most servicers will still take out the minimum regardless. So make sure you double check to make sure that you have the funds in your account for the minimum payment.
Two is better than one: Paying more frequently will reduce the interest built up each month. Instead of making one monthly payment of $300, make 2 payments of $150 a month. BUT (This is a HUGE BUT) if you can sign up for direct deposit, ignore this point, as getting a 0.25% interest rate deduction will probably be more beneficial.
Now let them steal your money! Just kidding... not really. You're one step closer to being debt free.
Cheers!
Ali
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