Saturday, November 8, 2014, AM | Leave Comment
With 40 million Americans facing student loan debt, there’s no doubt that this debt is spiraling into a financial crisis for the United States.
At the end of 2013, the average student loan debt per person was $29,400. Although the price of a college education may seem burdensome, it’s definitely worth the investment. According to AllGov, Americans holding a college degree make 98 percent more per hour than those who didn’t attend college.
If you’ve recently graduated from college and you’re preparing to make future student loan payments, here are some tips to help you manage your debt:
Understand your loan terms
Whether you’ve used federal or private student loans, both of these options usually provide borrowers with a six month grace period before making monthly payments. Check with your lender to find out when your first payment is due so you can avoid the consequences of late payments.
Know your options
If you’re struggling to pay off your student loan debt, there are a few options you should consider.
Loan deferment allows you to put your student loan payments on hold for additional months or even a few years. While this might buy you more time to save up money for your student loan payments, it’s important to pay attention to the additional interest you’ll accumulate during this time period.
Another option you might consider is loan consolidation. This means combining multiple student loan payments into a single payment with a weighted interest rate. Although this is a great way to make your payments more convenient, it’s important to take into consideration whether you’ll pay more in interest over time.
Research different payment plans
Depending on your income level, there are a number of payment plans available that can make your student loan payments much more manageable.
There are payment plans that are based on your monthly income as well as graduated payment plans that allow you to start with smaller payments in the beginning and eventually increase them in the upcoming years.
Don’t panic about your payments
Paying off student loan debt is stressful for most recent graduates. Although these hefty payments can eat up much of your paycheck, it’s important not to feel overwhelmed by your debt.
To help you conquer your student loan payments, make sure you carefully budget your money. By keeping track of your expenses, saving what you can, and setting aside money for your student loan payments, you’ll manage your finances without feeling too stressed. While you might have to make some sacrifices in the beginning, you’ll be thankful you were careful with your money as you paid of your student loan debt.
Pay off your most expensive loans first
Remember to always pay attention to your interest rates. Especially if you want to pay off your loans ahead of schedule, you’ll want to make sure you’re paying off the loans with the highest interest rates first. This will help you lower your student loan debt and pay it off quickly.
Regardless of how much student loan debt you have, it’s important to know your loan terms, keep track of your payments, and to create a budget. By following these tips, it’ll be easier to manage your student loan debt and pay off your expenses as quickly as possible.
What are some of your best tips for managing student loan debt?Facebook.com/doable.finance