Paying Back Student Loans on a Budget

Oct 9, 2017 by

Most of us would be hard pressed to find a friend or a relative without any student loans under their belt. It is common for Americans to carry this educational debt, too many sadly under educated about how these loans can easily default and affect them in the long-term. When living on a tight budget, it can be easy to forget about these large amounts of money once borrowed to help fund university courses and degrees.

Pay Loans While You’re in School

If you are able to, start paying your loans while you’re still in school. This is not always an option for students, but if it is, this is a great way to get ahead of the student debt that will inevitably follow graduation. For most types of loans, interest will start to accumulate while you are in school. When you arrange to start a payment plan, unpaid interest is capitalized and added on the larger balance.

This can help you save money in the long-term. If you have any questions regarding interest, make sure that you first consult your loan provider. This consultation can also be beneficial after you enter the workforce and aren’t sure where to start when it comes to paying off your student loans.

Choose the Best Repayment Plan

When you finally get that email that says your loan grace period is nearly over, there is no need to start crying (although we all may start sweating). Call your loan provider before you fall into default and discuss your repayment options. Many loan providers have a pay-as-you-earn or income-based repayment system, so ask about these options so that you do not fall into default.

Ask The Boss

For those fortunate to have found a good paying job after school, it is possible to ask your employer whether they provide any loan repayment or forgiveness programs for their employees. Loan repayment programs are a great way for companies to attract top talent in their field. You can promise to relocate or commit to staying for a set period of time in order to earn money toward your student loans.

Spend Less, Contribute More

In the best circumstance, you will have a repayment plan that matches your income level. If you have a low monthly payment, it is often a good idea to pay a little more each month when possible. Living on a small budget does not mean that you won’t live well when you’re living smart. Spending less on entertainment and buying household items in bulk are just two great tips for budgeting money well.

Stay Ahead of The Game

However, it is important not to lose track of your student loans. Whether you pay right away or wait until the very last day of your grace period, you should always keep on top of your financial affairs. Do not wait until the collection agency is calling after you in constant harassment, because not only is this distressful but it can have a negative effect on your credit in the long term. Resources such as consolidatestudent.loan can be of an enormous help if you feel lost and can’t be an adult quite yet.

While getting their education, students do not think much of the loans they’ve borrowed to pay for their classes and books. However, it soon sneaks up on them when they enter the workforce and adulthood. Be smart about acquiring loans and even smarter when you begin to pay your loans off.

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