Student loan debt can be one of the most daunting there is. The debt often comes due just a short time after graduation when a person is faced with a variety of stress and pressure to find a job and begin their adult life. It also tends to be tens of thousands of dollars of debt and the repayment schedule can last for decades. There are people who finished attending school more than 20 years ago who are still making monthly payments on their student loan debt.
So what can you do to make it easier to manage student loan debt?
These three tips can help:
Believe it or not, there are people out there who have a student loan payment deducted from their bank account automatically each month but they have no idea what they owe overall.
In some cases, there might be multiple payments deducted if money was borrowed from more than one lender. Student loans often come from a variety of sources and each of these loans will have its own unique terms and interest rates.
A crucial part of dealing with student loans effectively is to know exactly what you owe and to whom. Once you know how much you owe and how high the interest rate is on each loan, you can work on prioritizing the loans. Focus first on the loans with the highest interest rates because those are costing you the most.
If you have multiple loans, especially ones that have higher interest rates than others, you should consider refinancing or consolidating. Either of these options can help you save money overall. In some cases, you might pay a bit more each month but you’ll be paying for a shorter period of time, so your total amount paid back to the lender will be less. In other cases, you’ll be able to negotiate a smaller total amount and pay less each month.
Student loan lenders tend to be fairly flexible and will work with borrowers to ensure they are able to afford to pay back their loans. Just be sure to carefully review any paperwork associated with an arrangement before signing so you are aware of any hidden fees or penalties. Also make sure that early pay-off without a penalty is an option, just in case you ever reach a point where you can afford to pay the loan off early in full.
It might be tempting when you have a bit of extra income to put it toward something fun or another financial obligation you have. Instead, consider putting as much of your disposable income as possible toward your student loan debt.
Create a budget that funnels all of your “extra” money toward your student loan. Periodically assess this budget and see if you can afford to pay more toward student loan debt each month. If you receive a raise at work or switch to a better paying job, create a new budget that prioritizes paying off your student loan debt as soon as possible.
For more information on creating a budget, check out these tips from The Nest.
Student loans put a drain on personal income and unfortunately, drive some people to bankruptcy. If you want to take control of your student loan debt or you are in over your head and you need to take drastic measures, we can help.
For more information or to schedule an appointment with an experienced professional who can help you avoid problems, contact bankruptcy attorney R. Flay Cabiness, II, P.C. at (912) 554-3774 (Brunswick, GA); (912) 375-5620 (Hazlehurst, GA) or; (912)-554-3756 (Jesup, GA).
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