You won’t be surprised to learn student loan debt is a bit of an epidemic in the U.S.
The average graduate last spring faced more than $37,000 in loans. Many can expect a nearly $300 monthly payment for 10 years.
A mountain of debt is probably not what you pictured when you imagined your life after college. You likely expected an exciting job, a couple of kids, a beautiful house and a devoted spouse, not to repay student loans for the foreseeable future.
Yet, here you are. Tied to a much-less-romantic kind of ball and chain.
If you’re ready to take control of your student loan debt and lighten that burden, here are five things you should start doing today.
1. Figure Out What You Owe
The first step to getting your debt under control is knowing what you owe.
Considering you often sign off on student loans as a teenager without a clear understanding of what they even are, we understand if you’re not 100% sure where to begin.
Credit Sesame will let you see how much money you owe and to whom (even if you’ve defaulted on loans). It’ll show your balance on both private and federal loans and offer tips to help reduce your debt and raise your credit score.
For a more detailed look at federal loans, visit studentaid.ed.gov to find out which loans you still owe money on, how much you owe, whom you owe it to and how you can repay.
2. Pay Off Your Highest-Interest Loans First
If you have several loans and have to choose among payments, focus on your those with the highest interest rates first.
They’ll cost you the most money over time, so get them off your plate as soon as you can.
You can also try to get a lower interest rate by refinancing.
Refinancing will generally mean replacing your laundry list of loans with one (or a few) loans that bring all of your student debt under one umbrella.
This could simplify your life with one monthly payment, instead of several. It may also lower your monthly payment, improve your interest rate and/or give you more time to pay.
Enter your info at Credible to find out what your new interest rate could be.
On average, Credible helps you find a new rate about two basis points lower than the existing interest rate on your federal loans.
It might seem like a small difference, but a lower interest rate can mean a lot of savings over time. It’s helping grad Ashley Williams save more than $18,000 in interest over the life of her loan!
3. Start Making Extra Money
You’ll probably also want to do more than just keep up with loan payments.
If you want to get out from under the thumb of debt, you’ll need to start earning more money.
Unfortunately, we can’t recommend any reliable ways to get rich quickly. But we can help you get started saving — and growing — your money, even if you don’t have a lot to start with.
One of our favorite apps for people brand-new to investing is Stash. It explains investing in terms you can understand (without an MBA) and takes the guesswork out of it by automating your investment. It curates and categorizes funds to help you meet your savings goals.
Stash charges $1 a month, but your first three months are free. You can start investing with as little as $5, and you’ll get another $5 just for clicking this link and signing up.
4. Learn Your Repayment Options
If you can’t afford your monthly payment on your federal loans, don’t sweat.
But don’t ignore it, either.
A lot of options can help you cut that payment down and let you continue to repay your loan without straining your budget.
Income-driven repayment plans and Pay As You Earn (PAYE) limit your monthly payments to a percentage of your income and extend the period you have to pay beyond the standard 10 years.
You can also apply for a Direct Consolidation Loan through the federal government. This is similar to refinancing, but it’s only for federal loans.
Consolidating your federal loans could get you a lower interest rate and more manageable monthly payment.
5. Apply for Deferment (But Only if You Need To)
If you can’t afford your monthly payment due to unemployment, economic hardship, military service or other Department of Education–approved factors, you could qualify for deferment.
During months of deferment, you won’t owe a monthly payment for your federal loans.
It’s a helpful option if you temporarily can’t afford your monthly payment. But be careful not to use it if you don’t absolutely need to. Your subsidized loans won’t accrue interest during months of deferment — but any other loans will.
If you don’t qualify for deferment, your lender may grant a forbearance to allow you to stop making payments or reduce your monthly payments for up to 12 months.
You’ll continue to accrue interest, but you can avoid default.
Your Turn: What are you doing to pay down your student loan debt faster?
Disclosure: Our friends stopped inviting us over because we were always digging for loose change between their couch cushions. We use affiliate links instead so we still get invited to a few parties.
Dana Sitar (@danasitar) is a senior writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).
The post 5 Smart Ways to Not Be Part of the $1.3 Trillion Student Loan Epidemic appeared first on The Penny Hoarder.
source The Penny Hoarder http://ift.tt/2lcHic4
ليست هناك تعليقات:
إرسال تعليق