Still Paying Off Student Loan Debt? Here are a Few Tips
Some college graduates spend half their lives or more repaying student debt. That’s a long time, and it ends up being a lot of money. Here are five things you should know about paying off student loans, whether we’re talking about undergraduate or graduate education
Automatic Debit for Student Loan Payments Is a Lifesaver
If you have federal student loans, you should definitely take advantage of automatic payment options. Depending on the types of loans you’re paying off, automatic debit may save you .25% on your interest rate. That doesn’t seem like much, but every little bit helps. Not only that, but automatic debit ensures that your payments will be made on time, every time, so you won’t have to worry about forgetting an installment, and potentially damaging your credit rating. If you have multiple accounts/loans try consolidation to make it easier.
Student Loan Consolidation Can Ease the Burden
Consolidating student loans isn’t for everyone, but it does have certain attractive advantages. For one, it allows those who are struggling with cash flow issues to lower their monthly payments by extending the period of the loan, or by renegotiating interest rates. For another, loan consolidation allows multiple federal student loans to be consolidated into one monthly payment. Not only that but by reducing the number of trade lines on your credit report, it can help improve your overall credit score.
Whenever You Can, Pay Extra on Your Student Loan
The idea of ponying up extra cash that you’re not actually required to pay may not sound like your idea of a good time, but paying a little bit extra each month will help you chip away at your student loan debt faster. Even if it’s an extra $20 one month, or a spare $50 the next, it all adds up to faster repayment and lower overall costs through the life of the loan.
Loan forgiveness programs are available for those working in education, the armed services, and several other fields. These programs have relatively strict qualification criteria, so it’s best to research them before applying. That said, for those who do qualify for these programs, they can be a real boon, helping former students to save thousands of dollars, and speeding up the loan repayment process. If you would like to examine your options, Student Guidance can help.
Delaying Student Loan Payments Has Consequences
For those who struggle to make payments on their student loans, forbearance and deferment can seem quite attractive. They allow you to make lower payments for a period of time, or to delay loan repayment altogether. For those who anticipate landing a higher-paying job in the near future, these choices can work out well. But it’s important to remember that interest accrues on student loans the entire time they’re in forbearance/deferment.