Tushar Mathur is the creator of Everything Finance, a site about exactly that – everything related to finance. There, you can find information about investing, saving money, shopping, blogging, and making money online.
So… how do you pay off student loans after you graduate? It’s the $60,000 question – literally. How in the world should you go about paying off your student loans after you graduate? Take heart: you’re not the only one asking it. In fact, the cost of higher education has been the “go-to” political hot potato for the last few years. Although the Obama administration implemented a program to help recent grads manage their debt after school, it unfortunately ended earlier this summer. That’s why it’s important to understand how to pay off your student loans after you graduate – even without the extra federal incentive.
Find Out About Your Options
One way to get a handle on your student loan debt is to consolidate that bad boy directly through the federal government. Stop on by the US Department of Education’s website to obtain information about how to do this. You can also check out private loan companies that offer consolidation options, but the government is generally the most reliable – and cheapest – way to consolidate your loans around.
Once you have one single (and manageable) loan to repay, find out about income-based repayment. Many loan companies and the federal government offer this as an option. An income-sensitive program adjusts your monthly repayment based upon the amount of money you’re currently earning. This is great for grads who are just starting out with a company and trying to work their way up the ladder.
Once you have your repayment terms and loan amount figured out, it’s time to get organized. Inquire about automatic repayments – it’s the single best way to ensure you don’t miss a payment, and you won’t have to think about it again once you’ve set it up. Added bonus: many loan companies deduct half a percentage point or more from your loan if you opt to make automatic payments.
If you want to keep track of all your loans and other debts in one place, you can use ReadyForZero, which allows you to manage and pay off your debt in one place. You’ll get timely reminders about payments and you will be able to see how much interest you’re paying over the long run.
Make Your Payments Over – and On Time!
Once you’re organized and your payments are set up, it’s time for a little follow-through. Make sure that your payment is withdrawn from your account every month without fail. You should also ensure that your student loan company withdraws the right amount each month. Try to never, ever make a late payment – a late payment on a student loan can damage your credit score (check out this article on what happens if you can’t make your student loan payment).
In addition, making extra payments directly to your loan’s principal is the fastest way to pay off your loan over time. It will also save you major money in interest charges down the road. For those who may have student loans in the future, be sure to choose your student loans wisely. And for everyone else, hopefully the tips above are helpful in paying off your student loan debt!
Image credit: SLU Madrid Campus