There are a couple of ways you can have better control over your student loans. All it takes is some planning and sticking to that plan as best as you can.
I understand that this is easier said than done, but having a debt-free breezy life is more than enough motivation for that kind of hard work.
I also understand that situations depend on the individual. We’re talking about different amounts of debt here, all with their specific interest rates.
Some actually get their degree, and others do not. And we all know that it’s easier to get a steady income if you have the credentials to back you up.
For some, paying off a student loan can be done with minimal stress. It’s either because they don’t have much to pay off in the first place or they luck out and land an amazing job right after school.
But of course it’s true that this is not the case for everyone. For a lot of people, paying off a student loan is a huge burden. And they feel like they’ve been thrust into the world with a handicap.
That’s the reason why so many young professionals have anxiety or depression because of the loans that they have to pay off.
But regardless of your own situation, there are a couple of thing that everyone can do to have a better handle on their debt. I’ve listed them below.
Know everything about your loans.
Right off the bat, if you don’t know how much you owe, what the interest rate is, and how much your monthly payment is, you’re setting yourself up for failure.
Find out everything you can about your loan and record everything in a spreadsheet. List down how much you owe and who you owe it to. Find out how much time you have to pay off these loans without incurring too much interest on them.
Don’t attempt to go through this blindly.
Know your payment options.
Most of these student loans are paid off in a ten-year period. But that’s not the only way you can do it. Some loans have an income-driven repayment option that will set your monthly payments according to how much money you’re making.
Find out everything you can about federal student loan forgiveness if you didn’t take out a private loan. You might not be aware of how things can be easier for you simply because you don’t know all your options.
Come up with a proper strategy.
There is a number of factors that go into making a repayment strategy. You’ve got to ask yourself a couple of questions like:
- Does it make sense for me to pursue loan forgiveness?
- Is it possible for me to maximize my pre-tax retirement account to lower my reported income?
- Can I refinance the loan and pay if off in a shorter period?
- What’s the loan that has the highest interest rate and should I pay that off first?
Save, save, save.
I understand that saving is way more difficult when you’re trying to get rid of a debt. But paying off your student loan shouldn’t mean that you have to neglect your emergency and retirement funds.
This is why you’ve got to work extra hard and optimize your money. This is not the time to be spending on unnecessary purchases or living beyond your means.
Remember, the sooner you pay off your student debt, the lower the amount you’d actually be paying. Plus, you don’t want this debt to carry over to the next stages of your life.
Eventually, you’re going to want a decent credit score so you could be approved for a mortgage or a car loan. You might even feel like you’d want to start a family.
Your students should not be plaguing you anymore by then. And nothing truly beats the peace of mind that comes with knowing that you don’t owe anybody anything anymore.
Deil D Pecci is a writer and blogger based in Chicago who covers topics on personal finance and entrepreneurship. Deil D Pecci has made Chicago her home along with his wife and children.