Debt-free. Two words almost everyone with debt wishes they could say. A life without indebtedness has a lot of benefits, including extra cash for spending and less financial stress. Unfortunately, being debt-free is a dream that’s out of reach for millions of American adults because of student loan debt. If you have an outstanding balance on your student loans and are wondering how hard you should work to pay it off, here are a few things to consider before you make a serious attempt to pay off your student loans early.
How Does Student Loan Debt Affect Your Finances?
People accumulate debt in numerous ways. Some of the most common forms of debt in the United States include:
- Credit card debt
- Home mortgages
- Car loans
- Personal loans
- and, of course, student loans
Some types of debt, such as a home mortgage, play a role in advancing your financial well-being because they help you build equity. Other forms of debt, however, provide you with the means of short-term or long-term financial gain. Student loan debt is an example.
Individuals with high amounts of student loan debt often experience financial burdens such as:
- Low credit scores
- Difficulty obtaining other loans including a home mortgage
- High monthly payments
Although there are multiple negatives of student loans, there are many pros as well. Student loans are often the vehicle you need to help you achieve specific career goals and create the lifestyle you’ve always dreamed of.
Are There Penalties for Paying Off My Student Loans Early?
If you’ve discussed your student loan debt with others, it’s possible you heard someone point out there are penalties for paying off your student loans early. That, however, isn’t the case. There are no penalties for prepaying private or federal student loans.
Benefits of paying off student loans early include:
- Lower debt-to-income ratio
- Higher credit score
- Extra spending money
To pay off your student loans early, it’s a good idea to begin by paying the loan with the highest interest rate. If you’re making a payment above the minimum amount, most student loan services provide the ability for you to dictate where to apply the extra money. By assigning extra money to your debt with the highest interest rate, you’re able to save yourself money in the long run.
Are There Alternative Options to Paying Off Student Loan Debt?
Many people feel discouraged because it’s difficult for them to pay off their student loans early. It’s important for those people and others to understand that there are alternative options, including student loan forgiveness. If you have federal student loans, check with your student loan provider regarding current loan forgiveness opportunities. Other options include:
- Income-based repayment plans
- Loan consolidation
- Debt settlement
If you’re considering any of these options, it’s in your best interest to discuss them with trusted legal counsel or a financial advisor.
Trusted Student Loan Debt Settlement Lawyers Fight for You
The attorneys at McCarthy Law PLC are committed to helping you achieve financial health by alleviating the burden of your student loans. We’re experienced in student loan consolidation and debt settlement. Our goal is to educate you on all of the available options so you can make the decision that’s best for your life.The benefits of hiring a debt settlement attorney are endless. The biggest benefit is getting your life back to the way it was before student loans. Getting started on your way to being debt-free is easy. Simply call McCarthy Law PLC and schedule a free consultation. Call 855-976-5777 or fill out our online contact form today.