This blog post may contain affiliate links. Any revenue made from these affiliate links goes directly to the cost associated with running the Penniless Prairie Girl blog.
Today we have an amazing guest post about how to attack your student loan debt!
But first, let’s chat.
It’s been awhile! How have you all been? In case you haven’t noticed, I haven’t been around lately. Where have I been? Well between switching jobs (twice! oops…), buying a new house and trying to sell our condo, things have gotten a little bit hectic. Leave a note in the comments if your interested in a blog post on any of these topics.
Now, let’s get into our guest post!
7 Brilliant Ways to Tackle Your Student Loan Debt
Education gives us the credibility to achieve our dreams. However, not everyone has the means to continue their education. Increasing cost of education forces students to take out overwhelming student loans to bear the cost of college fees and tuition fees. This ultimately results in students incurring student loan debt. Therefore, many students are wondering whether or not going to college is worth the cost. Because even after attending renowned colleges, they are stuck with their low paying jobs. Thus, they are unable to find ways to tackle student loan debt. They find it difficult to pay off their student loans while making payments for other necessary things in life like utilities, insurance, grocery, rent, etc. And carrying the huge student loan debt is deliberately lengthen the process of achieving other important goals like buying a mortgage, a car, starting a family etc.
It is true that this problem has no easy solution, but you can get out of it by following some proper financial strategies.
Here you go:
1. Try to make regular payments
Regular payments can help you to avoid extra charges and penalties on your loan. If your monthly income is not sufficient to pay off your financial obligations, then consider a part time job to boost your income. By doing so, you can make your loan repayment easier. Remember, a missed payment may lead to major financial crisis. Your credit score may drop or your account may go to the collection agencies. Thus, you should try to make regular payments on your student loan.
2. Attend the loan repayment assistance counseling program
You should attend the student loan exit counseling program or Loan Repayment Assistance Programs (LRAPs) to understand the student loan repayment process. Loan Repayment Assistance Programs (LRAPs) also offer help to make student loan payments. However, you should meet the eligibility criteria. Some schools and employers serve Loan Repayment Assistance Program to the eligible students or employees. So, you should try to find out whether or not you are eligible to get help to repay your student loan debt.
3. Review all loan details
Ensure that you know all the details of your loan terms. Go through the documents and arrange them for future reference. Find out about the interest rates, grace period and all other important things. Remember, the grace period of the student loans can be different. Like what? Federal student loans offer 6 months’ grace period and Perkins loans have 9 months as a grace period. In the case of private student loan debt, the grace period for making the first payment can differ from one loan to another. Remember, making the first payment on time is important. Thus, you should be clear about the every detail of your loan terms.
4. Set up a time frame for repayment
It is advisable to set up an aim to repay your loan. 10 years might be sufficient to get rid off all your student loans. Stretching out the time period may reduce your monthly payments but you’ll end up paying more as interest on your loan.
5. Consolidate your student loans
If you are finding it hard to keep up with multiple payments on your student loans, you can opt for consolidation. Thus, through a single monthly payment, you can repay your existing debts.
If you opt for a consolidation loan, you need to borrow a new loan to pay off all your existing student loans. This way all loans get bundled into one, which means a single lender and a single monthly payment that you have to manage.
6. Talk to the lender
Many students have confessed that even after getting a degree, they are doing the same job what they used to do while pursuing the degree. Working for $10 per hour is not enough for fresh graduates when they have $30 thousand in student loan debt. However, if a student hasn’t got a job after completing his studies, he can negotiate and reduce his payments up to a certain percentage. If you are unemployed or getting a low salary, you can talk to your lender to get a revised repayment option as well.
7. Lower the principal amount
In a debt repayment process, you should pay the late fees first (if any), then the interest rate and then the principal amount. But if you have financial ability to make more than the minimum payments, then you should go ahead. By making larger monthly debt payments, you can reduce the principal and the interest rate too. However, it is advisable to send a written request to the lender to get the permission to do so. Make sure the extra payments are going to the principal amount. Often lenders consider the extra payments as future payments.
Lastly, it is true that young graduates are shackled with overwhelming student loan debt but they can overcome it with their determination. Remember, there are some government grants and non-profit organizations that help brilliant students so that they don’t have to leave their dreams midway. However, it is also advisable to stay within your means. Using credit cards to make ends meet can only make your financial situation worse. Thus, you should try to save a decent amount every month to repay your student loan debt as early as possible.
Today’s post is contributed by Amy Nickson, a passionate writer on finance. Amy is a professional blogger whom has started her own blog and also works as a contributor for the Oak View Law Group. Please share your opinions by commenting below.