Paying Student Loans: How You Can Pay Them Back Quicker
After graduating from college, you may be daunted by the fact that it is now time to pay off your student debt. Typically, you have a few months before repayments kick in, but they are coming.
Create a Budget
Calculate your income to debt ratio to ensure you are not dishing out more money than you are currently making. If you realize this is the case, find areas that you can scale back on and live under your means for a while.
Prioritize Debt Payments
Since your loans with higher interest rates will likely be your credit cards, pay those off first. Paying off these high-interest loans will save you from paying more in interest over the long run.
Set Up a Payment Plan Right Away
Consider tracking the end date for your loan repayment term so that you can avoid late fees and default status. This can ultimately result in a low credit score is you’re not on top of it. Paying student loans is critical to obtaining a positive credit score.
Refinance or Consolidate
Consolidation allows you to group all of your loans into one new loan so that you are making multiple payments to separate lenders. Loan consolidation can potentially lower a single monthly payment at a lower interest rate.
Increase Your Payment Contributions
As with some of the other above options, if you are able to, starting increasing your payments. Maybe that’s adding another $50 each month towards your repayments.
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