In the months after students graduate college, they may take on some credit card debt if they are unable to secure a full-time job.
However, once these recent grads do get a job, they should do their best to pay that debt off. Another debt load many students may have comes from student loans.
College graduates looking to pay this type of debt off faster should consider these four strategies.
Strategy No. 1: Reduce interest rates
Student loan debt can be tens of thousands of dollars, and any interest accrued may be significant. That being said, those with this type of debt may want to consider reducing their interest rates. Most loan providers have some sort of rate reduction offer, and taking advantage of one can help college grads pay off their debt faster. For example, most lenders offer a rate reduction for people who sign up for automatic debits for their payments.
Strategy No. 2: Make larger payments
If reducing interest rates isn’t successful, recent college grads might want to make larger payments. Of course, this will require the financial means to do so, but those who are able to pay more each month could save a good amount of money on interest. Borrowers who choose this method should evaluate their income and expenses and determine how much they can afford to pay, as making larger payments and leaving themselves with no money for other expenses is a bad idea.
Strategy No. 3: Create a strict budget
Another method that recent college grads can use to help pay their student debt faster is to create a strict budget. While this wont directly put money toward this debt, it can give people more money to add to their payments. By creating a budget, borrowers will know exactly where their money is going, which can help them find areas they can cut back or eliminate altogether.
Strategy No. 4: Get a second job
If all else fails, recent college graduates may want to consider getting a part-time job to supplement their full-time income. This could help give them additional money to put toward expenses, which, in turn, can allow them to have more funds to pay down their student loan debt. Specific second jobs that could be good for a recent college grad include a night-time and weekend bartender or a weekend retail cashier.