By M Katie Helle, CPA –
Student loans! Many individuals incur them. It is easy to not think about student loans when going to school because many times, they are deferred and payments don’t begin until after you complete your education. But when school is over, lenders seem to come knocking at your door quite expecting payments. For young adults, this can be overwhelming especially if you may be on the job hunt.
Speaking from experience, here are some tips to not allow student loans to control your life:
- Review your student loan debt and start chipping away at the smallest debt first. In other words, pay the minimum amount of all debts except the smallest one. Pay as much as you can towards the smallest debt each month to pay off quickly. This will not only save a significant amount in interest, but it will be very rewarding when that debt is paid in full. Once the smallest is paid off, move to the next one and so forth until they are all paid off.
- Work with your student loan lenders to find the best repayment plan for your budget. There are many different types of repayment options with student loans, specifically government loans. When finding the best repayment plan, make sure to understand how the payment calculation works and if annual recertification is necessary.
- If life circumstances change, don’t be afraid to reach out to your lenders and ask for help. Some will offer a short-term deferment to get you through this life change. Although you will continue to incur interest while in deferment, the relief of not coming up with the payment is sometime far superior than the additional interest you will end up paying.
- Speak with a financial planner to get assistance and support while paying off your debts.
At the end of the day, no matter what your student loan debt amounts to, you should be very proud you got an education to better your life. Though it may take a long time, when those student loan debts are paid off, you will be beyond grateful for investing in yourself to better your future.