Student loans suck. However, they’re a way of life for a large percentage of college graduates. Whether you owe $5,000 or $100,000, you’re going to have to pay them off – or risk some pretty dire consequences.
Making my student loan payments has never really bothered me. I knew exactly what I was getting into when I took them out. But that’s still just more money that comes in every month that goes right back out, and sometimes it feels like I’ll never pay off Uncle Sam.
Luckily, there are ways to lessen the financial sting of these payments. Here are some tips!
Identify Repayment Options
I received a packet detailing all of the options I had going forward. It was tempting to select the plan with the lowest payments, but that would mean extending the life of the loan and paying way more over time. Since I had a job and made enough to make a higher payment, I elected one of the higher options. There are some options that let you gradually increase the amount of payments over time, too. Pick the right one for your lifestyle.
Pay On Time
Your credit score will suffer if you’re more than 90 days late on a payment, and making payments on time is the best way to keep yourself in the good graces of the credit bureaus. Defaulting on loans is serious business – avoid it at all costs.
Pay More Than the Minimum Each Month
At first, I’d say getting into the habit of budgeting for the minimum payment is more than enough. But as you get better at making good payment habits (and, hopefully, as your earnings increase,) consider paying more than you owe. You’ll cut back on the interest being charged to you over time and can end up saving a ton of money.
If you have loans with multiple companies, this can avoid having to remember multiple payments a month. Consolidating loans has some upsides and some downsides, though, so talk to your lender about possible options. Ask whether consolidating will extend the life of your loans and end up costing you more – that could happen.
Got any other advice for loan repayment? The system can seem daunting at first, but by staying informed and on top of your responsibilities, good habits will form and that very, very expensive piece of paper on your wall can be paid off before YOUR kids graduate.
By Janelle O’Hara