HomeCareer AdviceHere's a Plan For Paying Off Your Student Loans

Here’s a Plan For Paying Off Your Student Loans

Author

Date

Category

Cap? Check. Gown? Check. Diploma? Check. Plan for paying off your student loans? Wait, what?

Student loans are an especially intimidating source of debt. When you embarked on your collegiate journey, your student loans represented something that was coming “someday” –– something you just did not need to worry about in the present moment.

But suddenly, that day has arrived, and you might be totally panicking, and for good reason. This generation has more student loan debt than any other before it, with national student debt totaling roughly 1.3 trillion dollars. That amount is enough to strike fear into the hearts of even the bravest post-graduates.

Below, check out our tips for dealing with student debt. Think of it as Student Loans 101.

Student Loans 101

Here is a list of ways to pay off your student loans.

Create an Action Plan

The first step to dealing with your student loans is to gather all the information and formulate a plan. Figure out when you need to start paying off your loans –– typically six months after you have graduated. If you do not already know, find out exactly how much you owe. Interest can accrue on student loans even while you are in school, so it is likely that this amount is greater than you remember it being. Interest rates on student loans tend to be fairly high, so this number will also affect how much you need to pay each month to make a dent. Luckily, your loan payback homepage can help you calculate how much you need to pay monthly over a 30 year period.

When you gather all the loan information, use your monthly income and any savings to figure out what you can afford to pay each month. Be sure to factor in your guaranteed monthly expenses, like groceries, rent, and utilities. And while it may seem lofty, you should also set aside a chunk each month to go to savings. You might think saving is a stretch when there are loans to pay off, but your 30 year-old self will thank you when they start thinking about purchasing a home. It might be helpful to set some financial goals to keep you motivated on your money saving journey.

Once you have every dollar accounted for, make a budget. This budget will be the cornerstone of your financial future. The hardest part? Sticking to it.

Stick to Your Budget

There is nothing more important than sticking to your budget. Hopefully, you have set aside a little money to have fun every month, but try your hardest not to exceed that amount. Look for budget options when grocery shopping, and keep eating out to a minimum. Especially if you just started a new job, you will see that your new income will accrue much faster if you keep spending to a minimum every month. Ultimately, the rewards of being frugal will benefit you more than those tempting impulse purchases.

While you may feel like self-inflicted financial constraints make you boring and old, they will make you a lot more comfortable when you actually become boring and old down the road.

Make Extra Payments When Possible

If you get a big bonus at work or a generous Christmas cash gift from mom and dad, consider putting it towards your student loan debt. Remember, the lower the number in your debt account, the slower the interest accrues. Any large chunk you can put towards your loans will go a long way towards relieving debt-related stress.

Check All Your Options

The student loan crisis is worse than ever, with a rising number of college grads falling behind on repaying their loans.

More than 1 million Americans a year are defaulting on their federal student loans!

If you’re in this boat, it might be time to think about refinancing. Doing so can help you pay off your student loans faster and save money in the long run.

Remember, sometimes you can make extra money just by finding new ways to save.

A big one that many people fail to remember is that you can save around $300/month just by refinancing your student loan debt.

How to Refinance Student Loans

Interested in refinancing your student loans right now?

Below are the top 4 lenders (get estimated savings in under 2 minutes):

  • SoFi (Rates as low as 2.58% — 7.25%)
  • Earnest (Rates as low as 2.57% — 6.32%)
  • Laurel Road (Rates as low as 2.80% — 6.38%)
  • LendKey (Rates as low as 2.56% — 7.82%)

Want free money?

  • Robinhood is a free investing app for your phone. I really mean free all around – free to join and they don’t charge any fees to buy or sell the stock. You can get a share of stock like Apple, Ford, or Sprint for free when you join through this link. The value of the free share may be anywhere between $2.50 and $200 and fluctuates based on market movements. You’ve got nothing to lose.

Make Smarter Money Moves in 2022

ImageDescriptionGo
personal capitalThe Smart and Free Way to Manage Your Money
  • Take control of your finances with the perfect union of technology and highly personalized service
  • Get access to free online financial tools, including retirement planner, investment checkup, net worth calculator and more
  • Digital-first wealth management advisor with 24,000 clients in 50 states
Learn More
personal capitalGet Up $500 in Free Stock for Joining
  • Commission-free stock, ETF and options trades
  • Get a free stock worth up $500 when joining (must complete application)
  • Simple, easy to use investor platform with no account minimums
Learn More
sofiAll-In-One Investing That's Easy to Use
  • Invest in stocks, ETFs, crypto, or automated investing in all one app
  • No commissions for stocks and ETFs
  • Complimentary access to SoFi Financial Planners
Learn More

Recent posts