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student loan debt was the first real debt I ever undertook as a young adult. And I soon found myself faced not only with my own student debt , but with that of a wife-to-be as well.
Rather than let what accumulated to nearly $50,000 in student loan debt between the two of us put a stranglehold on our finances, we worked together and used the situation as a valuable financial learning experience as we worked to pay off our combined debt.
Use Grace Periods to Your Advantage
If you?re lucky enough to have a grace period attached to your Student Loans like I did, you may be able to use it to your advantage. I had a six-month grace period after I graduated. This was time that I used to save up every extra penny I could in preparation to pay off my loans as quickly as possible. By the time my first payment rolled around, I already had several thousand dollars stashed away to apply to my loan total.
The Faster it Can be Paid Off, the Better
Just as with mortgage, credit card debt , or a car loan, the quicker student loan debt can be paid off, the more it can save in interest over time. While situations range from person to person, putting your best foot forward when it comes to paying off student loans can help you save quite a bit of cash over the years.
Even though we had relatively low interest rates on our respective loans (mine were a bit higher at around 6%), we still couldn?t really find much in the way of investments with guaranteed interest rates to counter there higher rates; therefore, we tended to put as much cash as possible toward student loans, then once they were paid off, focus on savings and funding retirement accounts.
Debt Can be Consolidated
While my loans weren?t large enough ? or around long enough ? to consolidate, my wife?s were, and since she had multiple loans at various interest rates , we thought that it would be easier to lump them all together at one low rate. Luckily for us, we managed a rate that was under 4%. Even then, we didn?t let that sway us from working toward paying them off as quickly as we could.
Interest on Debt Can Help With Taxes
For the short periods of time we had student loans to deal with, we found that the interest we paid (mainly on my wife?s loan) had a side benefit in the way of tax deductions. We were able to deduct this aspect of the loans on our annual taxes for several years while we worked toward paying them off, which while it wasn?t a huge savings, was a savings nonetheless.
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