Ways to Pay Off School Loans Ahead of Schedule

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Of course, anyone with school debt would like to eliminate that burden at the earliest opportunity.

And, for many students, the battle to repay those school loans is akin to Sisyphus pushing his boulder.

Roughly 44.7 million Americans are servicing almost $1.5 trillion in school debt…an amount that seems to increase exponentially.

While the ability to repay depends on a variety of factors, there do exist ways to satisfy the debt early, thereby achieving “significant” savings.

The first way appears self-evident…borrow only what you need. Although the temptation to keep unneeded money as a safety cushion is real, interest will be paid on the amount borrowed. If it’s not needed, return it.

The second way smacks of common sense…choose the repayment plan carefully. Loans have repayment plans based on a variety of factors. The longer it takes, the more interest is paid.

The third way seems rather unrealistic…make payments while in school. If you could make payments while in school, it’s likely the loan may not have been needed. Even if needed, what money is available likely will be used on day-to-day expenses.

The fourth way is the conventional way of paying down debt…make extra payments when able. The option to pay more than the monthly amount required always exists, often without penalty. Be sure to inform the loan servicer that the extra should be applied immediately to the principal, not held for future payments.

The fifth way makes it easy to overlook the debt burden…enroll in automatic debit. Sure, there might be reduction on the monthly payment for the servicer’s right to automatically draft the payment, but you are granting access to your personal account.

There is a HUGE disadvantage to each of the above ways of paying off loans ahead of schedule. In each case, your dollar performs only one job – paying off debt.

We recommend that you give your dollar two jobs – growing at a compounded rate of interest while it is being used to pay off your debt.

When your dollar performs two jobs, not only is debt eliminated much quicker than thought possible, your savings increases to the point that funds are available for large future expenses and, quite often, a continuous, tax-preferred stream of income in retirement.

Let us show you how…

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