College Loan Repayment Tips
Graduating college is a monumental moment in any person’s life. Years of studying, diligence and ingenuity result in a degree that opens doors to numerous career paths.
Unfortunately, graduating from college can also result in a large amount of student debt. According to Abigail Hess of CNBC, U.S. citizens collectively carried $1.31 trillion in student loan debt during 2017.
While staring down a sea of student debt right after graduation can certainly be intimidating, it isn’t impossible to pay off your loans in a reasonable amount of time. The following college loan repayment tips should help with that endeavor.
Don’t ignore debt
The biggest mistake you can make in regards to your student loan payments is to ignore the debt. Libby Kane of Business Insider explains that the debt isn’t going anywhere, and not dealing with it as soon as possible can have major repercussions.
Understand your repayment plan
Kane goes on to explain how important it is to understand the repayment guidelines of your particular student loans. If you don’t read the fine print, you might soon discover that you owe more than you thought you did.
Carefully combing over your college loan repayment plan will also provide you with plenty of useful information, such as your minimum payment amount.
Set a strict budget
Once you land your first job out of college, you might be tempted to start spending the increased amount of income that you didn’t have before. The U.S. Department of Education advises students not to do that.
Kane offers similar advice, stating that students might need to sacrifice certain items or activities in order to set aside more money to deal with debt. Matthew Burr, a student that Kane interviewed, gave up both cable and video games in order to set aside more money for college loan repayment.
Start a second job
Sometimes, simply eliminating certain products or activities is not enough to generate the added money you need for college loan repayment. Instead, you might want to consider the possibility of a second job.
This doesn’t have to involve the classic example of pizza delivery in the evenings. Brianna McGurran of NerdWallet advises college graduates to look for freelance work, which is a growing source of income and a form of employment that allows for flexible hours.
Pay more than the minimum
Simply making the minimum payment for your loans might appear to be the most tempting route to take. On the other hand, Zack Friedman of Forbes advises graduates to make more than the minimum payment on their student loans each month.
Paying more than the minimum doesn’t just get your student loans out of the way in less time. Friedman notes that it can also reduce the cost of those loans, due to interest accruing on your principal balance.
Stick to your goals
One of the hardest parts of dealing with college loan payments is sticking to a goal. Setting a goal and sticking with it will help you stay on track to ridding yourself of student debt at a much faster rate.
Of course, it’s important not to be too unrealistic with your goal. Life tends to throw curveballs toward college graduates, so allowing a bit of flexibility in your goals is ultimately crucial to achieving them.
Repaying college loans and ridding yourself of student debt is no easy task. Nevertheless, setting goals, keeping to a budget and understanding the intricacies of your student loans will ultimately go a long way in your journey to be debt-free.