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Here Are The Top 5 Student Loan Mistakes

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These are literally the 5 worst mistakes you can make with your student loans.
Here’s what you need to know – and what to do about it.
You pay only the minimum payment
The minimum payment is the minimum amount you should pay each month, but it’s not necessarily the total amount. Remember: interest is always accruing on your principal balance. So paying any amount more than the monthly minimum can lower the cost of your student loans. For example, let’s assume you have $50,000 of student loan debt at a 8% interest rate with a standard 10-year repayment term. By paying only $100 extra per month, you can save $4,923 in interest costs and pay off your student loans 1.99 years earlier.
You don’t apply for student loan forgiveness
Public Service Loan Forgiveness is for student loan borrowers with federal student loans enrolled in a federal repayment plan who are employed full-time in an eligible state, local or federal public service job or 501(c)(3) non-profit job who make 120 eligible on-time payments.
You never make an extra student loan payment
You may not like the idea of an extra student loan payment. However, making an extra student loan payment can be one of the best ways to pay off student loans faster. Here’s how it works: in addition to making 12 monthly payments per year, consider an extra payment once every three months for a total of 16 payments per year.
You never make a lump-sum student loan payment
Student loans do not have any prepayment penalties, which means you can pay off student loans anytime without any fees. A lump-sum payment can be any amount. For example, let’s assume that you have $100,000 in student loans at a 7% interest rate and a 10-year repayment term. If you make a one-time, lump sum payment of $5,000, you would save $4,132 on your student loans and pay off your student loans 8 months early.

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