If you’ve been keeping up at all with my personal debt updates, you might know that my student loan is the debt that’s on the chopping block right now.
I’ve been doing everything I can to get my student loan paid off ASAP.
Because I’ve come far in my journey with paying off debt, and because I’ve increased my income significantly over the past few years, I am hoping to have my student loan paid off in just a couple more months. Woohoo!!
I also feel super lucky because I didn’t have to take out nearly as much in student loan debt as many of my peers. I had some help from my parents to pay for college, and I also got scholarships and worked my way through school.
But, not everyone has these luxuries. If you’re one of 40% of adults under age 30 with student loan debt, here are some ways you can save money on student loans.
1. Make Payments During Your Grace Period
After you graduate from college, you have a six month grace period until you have to start making required payments on your student loans.
This might sound awesome, but if your student loans aren’t subsidized, they’ll start accruing interest as soon as you graduate and that interest will be added to the principle balance at the end of the 6 month grace period.
This means that interest-turned-principle will accrue interest just like the rest of your loan until it’s paid off and you’ll be paying interest on interest. Grr!
Unfortunately, I didn’t take my student loan seriously and I wish I had made payments on it as soon as I graduated instead of waiting until they were required. I was so bad with money back then! I can’t believe how much money I wasted and how much I could have saved by making payments sooner.
2. Sign Up for Auto Payments
One smart thing I did do to save money on student loans was to sign up for automatic payments to be withdrawn from my bank account each month.
Not only does this keep you from missing a payment and being charged late fees, most lenders will give you a discount on your interest rate.
The discount I got was .25%, which may not sound like a lot, but it can add up to hundreds of dollars of savings over the life of your loan.
3. Pay Off Your Loans as Fast as Possible
Of course, the easiest way to save money on your student loans is to pay them off ahead of schedule.
This will save you money on interest, and allow you to free up your future income for other financial goals.
Related Post: 9 Smart Tips to Pay Off Student Loans Faster
4. Refinance to Get a Lower Rate
You don’t have to be stuck with a high interest rate on your student loans. Refinancing your debt can help you get a lower interest rate so you save money.
One good company to use for refinancing your student loans is Credible. They refinance all types of student loans, like federal, private, and even Parent PLUS loans. Their borrowers save an average of $18,668 by refinancing!
Plus, if you use my link to refinance your student loans with Credible, you can get a $200 referral bonus.
If your monthly payment is lowered when you refinance, you can always pay extra. You could continue paying the same amount per month that you were paying before you refinanced. If you do that, make sure your extra payments go to principle. This way you’ll be able to save money on student loans!
5. Use an App like Pickpocket.me
Pickpocket is new app that is similar to Qoins. But, instead of rounding up your purchases and putting your spare change toward your debt, Pickpocket will put 10% of every dollar you spend toward your student loans.
They call it stealing from yourself to give to your student loans.
If 10% is too rich for your budget, you can always adjust the amount.
But the coolest part about Pickpocket is that you can get your family members involved in helping you pay off your student loans too!
Family members can act as a sponsor to match your contributions, which can help you pay off your student loan 2X-4X faster than if you do it alone.
According to CJ Fowler, one of the co-founders of Pickpocket, this can be a good way for older generations to feel like they’re giving back to their family members by helping them improve their finances.
CJ himself is actually a sponsor for his younger brother’s student loan payments through Pickpocket.
Pickpocket is definitely worth checking out to help you save money on student loans. Plus, it’s free as long as it’s in beta!
6. Deduct Your Student Loan Interest
Although paying interest on any debt sucks, at least your student loan interest can be deducted from your tax return.
You can deduct up to $2,500 of interest you paid during the year. This includes both required and voluntary interest payments. Plus, you don’t have to itemize your deductions in order to claim this on your tax return.
I’d call that a win!
What are you doing to save money on your student loans?
This is a sponsored post written by me on behalf of Pickpocket. All opinions are 100% mine.