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8 Tips for Repaying Your Student Loans

Congratulations on your graduation … now hand over that cash we lent you! Sound familiar? If your six-month grace period is over or quickly approaching, then it’s time to buckle down and start repaying those dreaded student loans. Sounds easy, right? Wrong. On top of looking for work in a measly job market, graduates have to start managing their mountain of debt, often for the first time. Paying student loan debt is a frustrating thing, but it doesn’t have to ruin your life either. Thankfully, there are many insightful resources and programs out there to help you tackle your student loan debt wisely. For now, check out these eight tips for repaying your student loans to get your mind on your money.

  1. Make payments on time:

    Just like you wouldn’t miss a credit card payment, you shouldn’t miss a loan payment. Making on-time payments will help you avoid the expense of late fees and allow you to build or maintain good credit. Mark your calendar, set monthly reminders on your phone, or do whatever it takes to remind yourself that a loan payment is due.

  2. Set up automatic debit:

    If you don’t trust yourself to remember to pay on time or just don’t want to bother going through the process of entering your information online or sending a check, then you should strongly consider setting up automatic debit. It’s convenient, quick, and you’ll never have to worry about late payment fees. When you sign up for automatic debit some lenders may reward you with an interest rate reduction or other benefits for loans with on-time payment requirements.

  3. Make payments as soon as possible:

    Just because you have a grace period between graduation and your first loan payment doesn’t mean you have to wait until this day to start making payments. In fact, the sooner you can start making payments, even small ones, the faster you’ll be able to pay off your debt. While in school, or just after graduation, start paying the interest on your loans to get a head start on your debt and save money overtime.

  4. Pay off private student loans first:

    If you took out private loans in college, you should try to pay them off first for many important reasons. Private loans typically have higher interest and do not carry the same generous benefits of federal loans, like deferment and income contingent repayment plans. Also, private loans generally cannot be consolidated and have harsher penalties for default. All in all, private loans are extremely inflexible and can make your debt skyrocket if you’re not vigilant with your payments.

  5. Know your loans:

    Loans can be very confusing, especially when you’ve taken out multiple ones in school. But, before you start throwing money at your loans, you need to know what kind of loans you have, the loan amounts, lenders, and repayment statuses of your loans. Read the fine print, and don’t hesitate to call your lender for clarification. Another good resource for retrieving and keeping track of your federal loan information is the National Student Loan Data System for Students.

  6. Stay organized:

    Staying organized with your student loans will help you make on-time payments and get your debt paid down in a timely manner. This is especially important if you have other kinds of debt, such as credit card debt or car loans. Staying organized will help alleviate some of the stress of making monthly loan payments and help you keep track of rent and other bills.

  7. Consolidate with caution:

    Consolidation is an option for students who have one or more loans that they want to combine into one lump payment. Doing so usually lowers your monthly payment and allows for more repayment options, but it can also extend the life of the loan and cause you to pay more interest over time. There are risks with consolidating, so it depends on how much you owe and how close you are to paying off your debt.

  8. Set realistic goals:

    Paying down debt can feel like a never-ending battle. Even when you’re making significant progress, it still feels like the end is nowhere in sight. One way to boost your debt reduction and get closer to paying your loans off is to set realistic goals to help guide you along the way. The standard repayment time frame is 10 years, but it may end up taking less or more time to fully pay off your debt. Ideally, the sooner you can pay off your debt the better, but if you’re not willing to cut corners in order to make larger payments, then you may be better stretching out your loans to 20 or 30 years instead. The decision is up to you, but it will definitely help speed up the process by setting realistic repayment goals.

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