When starting college, most students don’t really give much thought to the fees because everyone knows they can get student loans if their family can’t cover it.
However, many students study for more than just four years of undergrad before getting a job. By that time, they are usually drowning in debt. That’s why you must have a good way to manage your debt.
No matter how many years you studied, you probably have a good amount of student loan debt even if you started working after undergrad. To help you out, here are some simple ways to manage your student loan debt.
Understand Your Loan
The first thing you should do is go over the terms of your loans. When you were getting the loan, you were a teenager and going through the stress of starting college. Once you got a start, you may have gotten additional loans every year, private or federal, just to get through college.
No matter how many loans you got to get through your studies, you should look at the repayment terms, late fees, interest rates, and penalties. With this information, you can handle your debt better.
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Know Your Grace Period
Grace period is a term used for the length of time you have after graduation and before the time you have to make your first payment. Your lender, whether private or federal, will usually give you some time to find a job, move, and get settled before making the payments.
While normally these range from six to nine months, you should find out where you stand with each of your loans. Also, inquire with your lenders because some may allow you to defer to a later date.
Calculate and Arrange All Your Debt
As with any type of debt, you need to know the total amount you owe and to whom you owe. Therefore, get the documents from all your loans and add up the total amount and the monthly payments.
You should also separate the interest and principal amounts, which help you make higher payments on the principal amounts whenever you can to lower the overall interest you pay.
Then, you should arrange your debt with the highest interest at the top of the list. Ideally, you should be able to pay all the debt every month. However, you should prioritize the higher-interest end over the lower-interest loans.
Explore Alternative Options
With federal and private loans, you can reach out to the lenders and figure out an alternative payment plan.
With federal loans, you may have the ability to extend the term of the loan, pay lower in the beginning and more towards the end, or cap it at a certain percentage of your monthly income, among other options.
Private student loans are trickier, but you have great options like Student Loans Settlement Program to make things easier.
Consider Auto-Pay
Almost every one of your lenders will offer the student loan auto-pay feature, where they deduct the amount from your bank or credit card at a set date every month.
If your income is reliable, like paychecks, you can contact your lender to find out what discounts they offer for setting the account on auto pay. Even if it’s a small discount, it can add up over time.
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