Whether you’re kickstarting your college career or proudly holding your diploma, financing college is a major undertaking that requires careful planning and preparation. As an increasing percentage of college students rely on loans to fund higher education, it’s important to know how to handle your student debt. To help you on your way, here are a few savvy tips to repay your debt faster and smarter.
1. Seek out financial aid
For those entering the wonderful world of college, congratulations! Although your savings account is sure to take a hit from tuition bills, there are plenty of options that can help ease the financial burden. Take steps such as applying for FAFSA, seeking out scholarships at every opportunity and getting a part time job. By doing so, you could save thousands.
2. Know your loan
Many loans offer a grace period after graduation, so take that time as an opportunity to familiarize yourself with your loans. What types of loans do you have? What are the interest rates? When will payments begin? Depending on whether your loans are federal or private, you may be able to take advantage of a slew of benefits, including fixed interest rates, income-based repayment plans and loan forgiveness programs. You may also be able to consolidate your student loans and get a lower interest rate. Take all this information into account and design a repayment plan that will work for your budget.
3. Pay off more than what’s due
When it comes to tackling student debt, a good strategy is to pay more and pay often. To help stay on top of your loans, set up automatic payments to ensure you avoid late fees. Even better, some loan providers offer discounts on interest rates if you opt into auto-paying, which saves you some of your hard-earned cash. If you can, set these automatic payments up for an amount that’s higher than what is due. That way, you can pay the loan off faster and spend less money on paying off interest.
4. Embrace the frugal life
Save money whenever you can, so you can keep putting more and more toward your student loans. Living with a roommate, swapping takeout for meal-prep, and checking out free or low-cost entertainment are all ways you can save money every month. If you’re lucky enough to find yourself with a little unexpected cash, treat your student loans with an additional payment before treating yourself. Small sacrifices now will pay off later when you’re living debt free and can spend more of your money on what you want.
Looking for extra support as you adjust to life after college? We can help. Schedule an appointment with one of our financial coaches, and we can help you get the ball rolling.
