After you’ve graduated from college, it’s time to deal with two major things—job hunting and repaying those dreaded student loans. Those student loans that you took out in college no longer differ and start to add interest. The sooner you pay your loans off, the better. Paying your loans off faster means paying less interest over time, and even just getting it over with. One easy way to pay down those loans is to use an auto-debit method.
How Auto-Debit Works
Auto-debit is basically an auto-payment system. Say, for example, that you know you get paid on the 15th of each month, so set up the auto-withdrawal for the 16th. With an auto-debit system in place, you won’t even have to put a reminder on your calendar, nor will you have to worry about late payments. As an added bonus, many services give you a discount on your interest rate if you chose to enroll in the automatic payment plan. It may not be a huge discount, but a little can go a long way. Not every service offers this, so you’ll have to look at your specific student loan page to see if it is. Even if your servicer doesn’t offer a discount, auto-debit is still something you should consider using.
Benefits of Using Auto-Debit to Pay Off Your Loans
Auto-Debit is a great option when you have just started working and are preoccupied with keeping up your new job demands and having a hard time keeping track of due dates. Between rent, bills, groceries, and whatever else, having one less thing to keep track of really makes a difference. That doesn’t mean you should set up auto-debit and forget about your student loans, but auto-debit lets you put student loans in the back of your mind in the meantime. Your lender will charge you an interest regardless of why you are late with your payments.
If you tend to spend your earnings as soon as you get them, setting up the payment for the day after you get paid could keep you from paying more fees and a higher interest rate. Before long, you’ll take a look at your student loan balance and see that you have made some progress.
Even if you aren’t preoccupied with something or spend your entire paycheck quickly, it can still help you. You don’t have to worry about remembering when to make your monthly payments. The process is automatic, so you don’t have to manually pay every time either. You won’t miss any payments, which means you won’t default either.
Should You Use Auto-Debit?
It takes the stress out of due dates and allows you to focus on your new career. If you are wondering whether auto-debiting your student loans is a good idea—yes, it is. As long as you can afford it, using auto-debit is a great way to never miss any payments or go into default.
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