Paying Off Student Loans
Paying Off Student Loans Faster By Using These Simple Tips
It’s been a long four years, but you finally graduated from college. You really put forth a lot of effort and studied hard to earn your bachelor’s degree. Searching for a job has begun, and in addition, you are being faced with paying off student loans that are mountain high.
There may be a faint light at the end of the tunnel to assist you in repaying student loans fast. However, it’s essential that you fully understand the terms of your student loan debt in order that you handle them properly.
Many students blindly apply for loans and don’t even keep track of them. Various creditors send them statements that offer some explanation, and the student doesn’t even look at them.
While you were still in college, there were no bills being sent, but the monthly or quarterly statements showed the balance owed, and some other terms. Making yourself familiar with the terms and conditions of the various loans is extremely important.
Now that you have graduated, paying off student loans will more than likely begin within six months.
You need to make a detailed listing of your various student loans by creditor. The listing should include the monthly due date, interest rate, the minimum payment due, contact information, and the balance of the loan.
Once that is done, re-order the list so that the highest balance is at the top. Also circle the one with the highest rate of interest. When you have that done, you will be able to get a clear picture of what you owe, to whom, and the highest rate.
Using this approach, and depending on the job that you are able to get, you should be able to repay the loans yourself in a few years. If your loan balance is substantial, it may take a little longer, but with dedication, it can be done.
Some students prefer to repay the largest loan first, while at the same time, making the minimum payments on the other loans. Once that loan is repaid, they take that payment and start paying off student loans with the next highest balance or the highest interest rate.
Other students like to repay the smallest loan first as a motivational approach. Some repay the highest rate of interest loans first. However, it’s vital that you pay the minimum payment, at least, on all the other loans.
Avoid default and any other type of negative action. If you’re not able to handle a plan such as this, you should consider consolidating student loans. You may be able to have one loan, one lower payment, and quite possibly, a lower rate of interest. [bctt tweet=”Don’t default. Consolidating student loans may be an option.” username=”HBSMoneyTips”]
You should also look into loan forgiveness. There are plans for various professions where a certain amount of your loan will be forgiven if you serve in a certain area for a specified period of time.
Whatever method you select for paying off student loans, be sure that you understand your debt and make a serious effort to repay them. The quicker you pay them, the less interest that you will have to pay.
Don’t start your career with bad credit because of delinquent student loans. You need to be aware as well, that filing bankruptcy will not eliminate student loans.
So, please carefully set up a plan for paying off student loans in a timely manner.