Tips To Manage Your Student Debt

Aug 6, 2016 by

Does your college debt look overwhelming? Well, you aren’t alone in this! As per the Federal Reserve, the education loan aggregate over $1.3 trillion in the United States and stands second to the mortgage debt of the nation.

Ironically, the student loan burden is making it all the more harder for the graduates to purchase a house. Politicians are concerned about the issue and its solution and in the meantime, it is the American individuals who are striving hard to work it out. Designing a plan to handle your student loan could be hazardous for your future fiscal health. Check out some of the tips to get it in control:

  • Sum up the total debt amount

Similar to any kind of debt condition, all you need to do is firstly calculate the amount of money you owe. Students pass out with several loans, both private and governmental sponsored. So, pull up your socks and do the mathematics. Once you know the total debt, you can draft a plan to pay it out.

  • Find out about the terms and conditions

Once you acknowledge the real size of your debt, find out the tenure of every loan. Each of the loans will hold a different rate of interest and different repayment conditions. You surely need the details to design a payback strategy which eradicates extra fees, interest and penalties. You can always search online to find out the best repayment plans for your kind of loan.

  • Check for the grace period

Once you jot each and every point, you’ll find out that every loan carries a specific grace period (it is tenure you have after graduation to clear your loan). They can also differ according to your loan. While few banks give a grace period of 6 months other offer a 9 months grace period to commence making payment.

  • Go for consolidation

Right after when you’ve got all the details, you may wish to see the options of consolidating all the loan amount. The best part about consolidation is that it reduces the monthly payment burden. It also enhances the payout period which works as an additional blessing. And what serves as the icing on the cake is that you also get the benefit of reduced interest rates. Also, once you go for consolidation, you can wholeheartedly get rid of small education loans in no time. Click here to compare the loan terms before signing up for any debt consolidation plan.

  • Clear out the high loans first

Now coming back to the debt payout strategy, it is advisable to clear the loan with the rate of interest first. A known idea is to calculate a specific amount above the aggregate monthly required payout, then use it to clear the debt with highest interest rate first. Once it is cleared, you can continue the similar strategy by switching to the second highest interest rate loan and so on!! It is very fruitful and helps in gradually reducing your loan amount.

Use these methods to get rid of your student debt as soon as possible!

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