Loan Acceleration.

Money is a major concern among students and Planet College regularly features entries about money. Especially as graduation approaches the necessity of re-paying student loans looms on the horizon. This is an entry about splitting payments, a tactic which is sometimes useful in paying back borrowed money. Hence the term Loan Acceleration.

With some luck and plenty of persistence you will be a graduate soon. You will be leaving Planet College and it is likely you will be leaving with at least some debt.

     Other than getting some kind of worthwhile employment the situation on the minds of you and  99.9% of all the rest of the other college graduates is debt.  Debt is money owed and this debt is from school loans.  The statistics reflecting student debt and the average amount owed by a student at graduation are available from numerous sources including the United States Department of Education.  One source puts it at $25,000.00 per student as of 2011.

     You know what you're debt is, don't you?  Well, if you don't over break it might be a good time to determine just exactly where you are with you loans.  And with that information in hand it will be a very good idea, a very, very good idea, to develop a program, your own program, to handle this debt.

     Planet College has a suggestion which some students are employing successfully in reducing the total they will repay on their loans.  The approach they are using is called 'loan acceleration.' What this means is by employing a procedure in repaying, making the actual loan payments, they are reducing the overall total that they will eventually have repaid. The procedure, simply put, is splitting the payments. This is possible because for most loans there is a monthly payment due. Splitting the payment, making two payments totaling the monthly due, rather than one, can reduce the total due faster than just making one payment.

     This is how it helps. The first payment is always applied to the interest.  Splitting the payment allows the second monthly payment to be applied to the principle, the bulk of the loan.  Paying this way reduces the total sooner.  This has the effect of overall reducing the time it takes to pay the loan back.  Reducing the time effectively reduces the TOTAL amount the borrower will have paid by the time the loan is paid off.

This has been a Planet College entry about loan acceleration. As always Planet College counsels students and graduates to verify any information about their student loans. It IS your money.