Paying down your student loans the old-fashioned way is commendable but very slow and painful. Each month, millions of student loan borrowers send their lender one payment by check or direct deposit. The lender recommends a monthly payment, and the borrower makes that payment. Month after month the same payment is made again and again until about ten years later, the loan is paid off.
Here at GradFin we recommend reeling in your whale of student debt faster. There are three ways to do this, and we can facilitate this process for you:
1) Ask your employer to pitch in a monthly payment. If your employer pays a monthly payment in addition to your regularly scheduled payment, your payoff schedule will shrink dramatically. Think about it, if your employer pitches in only $100 per month on your student loan, and you stay with that employer for 5 years, that could help you prepay your loan by $6,000 ($100 x 12 months x 5 years). What does that mean to a person with a balance of $18,000? It knocks it back by 33 percent in 5 years. Your employer has cash and needs to keep you around. So ask him to sign up and we'll get the process started right away.
2) Ask your parents and/or grandparents to pay a small portion each month. We have several customers that have already asked their parents to pitch in a monthly payment. This process is allowing GradFin customers to tap their loved ones for help and get out of debt much faster. With the help of their parent's payment of $50 per month, one of our customers is expected to be out of debt 25 months faster than if their parent did not contribute. GradFin will facilitate a payment from your parent to your lender. No need for you to be the middleman and reduce the temptation to use the money on something else. That money should go straight to your lender. So ask your parent or grandparent for help and sign up with us right away.
3) Ask for a Moby Debt Gift Card for Christmas. Ask your parents, friends, or Secret Santa to visit www.MobyDebt.com and purchase a Moby Debt Gift Card for you. The receipts of the Moby Debt Gift Card will go straight to your lender to pay off your debt. The process is simple. Send your Secret Santa to www.MobyDebt.com and have them purchase a $25, $50, or $100 gift card. After they purchase the card, you can enter in the order confirmation number at www.MobyDebt.com. If you do not have an account with us, we can set one up. All we need is your lender account number, birth date, and name of your lender. We will then send the gift card receipt to your lender.
We look forward to helping you pay off your student loan debt in new ways so you can reel in that whale of student debt much faster.
With the fourth Republican presidential debate now in the books, its disappointing to see that there was no focus on the student loan crisis. This debate was sponsored by FoxBusiness and the Wall Street Journal and covered multiple economic issues such as taxes, healthcare, trade, federal debt, economic stability in the world, etc. Those are all seriously challenging and emerging issues that voters care about, but how about some focus on the high cost of college and student loans?
What better issue to dissect in a debate than the number one liability facing Millennials and younger Americans - student debt. For far too long, Washington has ignored the problem of rising loan for college grads. Since 1993, the average debt per borrower in each year's graduating class has risen from $15,000 to well over $30,000.
Real problems deserve real solutions in Washington. GradFin calls on our presidential contenders to start taking the problem seriously and talking about real solutions that address our student loan woes. One of the ways to help students with their debt is to incentivize companies to help pay their employees student loans. All of these employees went to school (and in many cases took out loans) to one day work for a company. So why not allow reduced taxes on employer debt repayment assistance programs to help borrowers reduce their debt load faster.
GradFin will be working to find ways to get these issues in front of Congress. We don't think anyone will stand up for this cause unless we fight for it by pushing for change.
Over 40 million Americans have student loan debt. For a majority of these people, it will take over a decade to pay back those loans under the current terms outlined by the lender. Student lenders benefit the most from high principal balances combined with high interest rates. The longer the principal balance stays high, the more interest can add up on the outstanding loan. Paying down these loans is difficult if most of the monthly payment goes to the interest rather than the principal.
If borrowers can make larger monthly payments to their principal balance, this will knock back the total amount owed on the loan and thus reduce the total time it will take to pay back the loan. However, it's pretty clear no student lender wants you to pay off your loan faster because the longer you have a balance, the more interest income a lender will make.
What are pre-payments and why do student lenders hate them? Pre-payments are a monthly payment made to your loan in excess of the minimum required by the lender. For example, if the lender requests $200 per month as a minimum payment, and you pay $300, you are making a pre-payment of $100 ($300 total payment minus $200 required by lender). The $100 in excess of the minimum required makes lenders scream because that reduces the pot of money that sits there collecting interest.
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