Learn How to Manage Your Loans Now
Perhaps the best piece of advice anyone could give to their former-self is to manage student debt better from the start. Student loans are hard to avoid all together, but there are plenty of ways to reduce the amount of debt you’ll eventually owe.
Whether you’re planning for yourself or your child, here are just a few ways to manage student debt better:
Before taking out a student loan try applying for any (and all) scholarships you qualify for. The application process isn’t easy, and often requires writing on your part, but they can help save you thousands in debt.
Multiple loans are often required to cover the cost of a four year university. It helps to get organized. To help reduce the time paying loans, create a “favorites” folder in your browser. By bookmarking your loan payment pages you can access them quickly and easily. Create an excel sheet to help keep track of usernames, login IDs, passwords and more. By keeping track of account numbers, logins and passwords you’ll never have to worry about forgetting your account details. Just make sure to password protect the excel sheet in case your device should end up in the hands of someone other than yourself.
Create a Budget
As a new member of the workforce you may not have the funds to pay your student loans. There are plenty of options for new graduates including forbearance and deferment of payments. The issue becomes mounting interest. It’s okay if you can’t make payments right away, but it’s important to figure out your finances and begin making payments as quickly as possible to reduce the amount you’ll pay overall. By creating a budget for yourself you can make timely payments, and reduce the amount you’ll owe and even rid yourself of debt sooner than the term of your loan.
Refinancing during the recession was near impossible, but start-up companies like SoFi now make it possible to refinance your student debt. By bundling multiple loans together you can reduce the amount you pay in interest, and even reduce what you owe each month. If you built up good credit in the years since graduating, refinancing could be a way to save on student debt.
Don’t be swindled by would-be scammers. There are a number of fake websites dedicated to student loan “forgiveness” and student debt “settlement” that charge an upfront fee and monthly payments to help you rid yourself of student debt. Don’t fall for these scams. Do your research before taking any action against your student debt.
Many student loan lenders provide discounts to customers who set up auto-payments. You can decrease your interest rates by .25% by allowing the lender to remove funds on your due date automatically. It’s also an easy way to make sure your payments go out on time and you don’t acquire late fees. Just make sure you always have funds in your account so that you don’t overdraft.
Student debt isn’t abnormal, and it doesn’t mean the end of the world. If you manage your finances responsibly, and create a repayment plan for yourself you’ll be out of debt without financial burden.
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