For many people graduating from college, preparing to create a plan for managing student loans is part of the graduation process. Getting a diploma is an exciting time in life because it marks a new milestone towards achieving your dreams, but financially it can be both a gift and a curse. On one hand you’re ready to get a full time job, find a new residence and start your life as an adult. On the other hand, you now have to start paying off your student loans.
Recent grads can be overwhelmed with all the financial responsibility that comes with a diploma. There’s rent to pay, bills to keep track of and student loans to pay off. But debt doesn’t have to be a struggle if you don’t let it be -- all you need for managing student loans is a little bit of guidance and a payment plan.
In just five easy steps you can make sure your payments are always made on time and be well on your way to becoming debt free of your student loans.
Figure out exactly how much you owe
The key to surviving student debt -- or any kind of debt -- is to be honest with yourself and how much you can realistically afford. So often people underestimate their actual financial state and this can only lead to bad things like late payment and interest penalties.
If you think you owe less than you actually do or if you aren’t sure of the terms on your student loan you’re more likely to miss payments and have extra (a.k.a. unnecessary) fees. Sitting down and getting a clear picture of your overall financial situation, including your student loans, will help you set up payments and be on your way to successfully managing student loans.
Set up affordable payments
Every type of debt has a minimum required payment and that will help your credit stay in good standing, but making more than the minimum monthly payment can help get your student loans paid off faster. Even adding an extra $5 per month will help save money on interest payments and cut down the life of your loan.
Setting up an automatic transfer (with your pay check cycle) from your checking account to your student loan is a great way to ensure your payments are made on time each and every month
Add the costs into your monthly budget
Make sure your student loan payments are affordable. If you pay too much onto your debt you may find yourself short on cash for everyday living expenses. The last thing you want to do is make payments onto your student loans and then use credit for other expenses such as buying groceries. That’s a cycle that will only leave you in more debt and we’re sure you don’t want that.
Using financial calculators and a budget software can help you determine your monthly living costs and set an affordable budget that includes your student loan payments.
Consider consolidating your payments
Having more than one student loan payment may be unmanageable, consider consolidating them together into one easy monthly payment. Recent graduates are automatically placed into the default repayment plan, but there are actually several different options for student loan debt repayment. We can help find the best consolidation plan for managing student loans with your personal budget.
Get help to figure it all out
If you’re not sure where to start when it comes to setting and living on a budget or paying off student loan debt, contact a specialist who can help. We’ve helped over 300,000 Americans find a personal budget and pay off their debt and we can help you too!
Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve.
CESI is NOT A LOAN COMPANY