Contrary to what you might be feeling at the moment, student loans don’t have to hover over your head for life. They also don’t mean that you can’t have a life as you are paying them off. It is best, however, to make a repayment plan and start to pay them off as soon as possible.
Here are some important steps to take when first confronting your student loan debt:
1. Calculate how much debt you owe
Make a spreadsheet of the different loan balances, monthly payments, interest rates, and due dates. It will make paying off your loans more feasible as all of the numbers will be laid out in front of you.
2. Plan your monthly budget around repaying these loans.
Calculate necessary expenses such as rent and food and calculate ways to cut expenses and/or earn more money. It is essential to make the payments on time in order to build a good credit history. Defaulting on these loans can lead to harsh consequences such as the government withholding tax refunds and benefits such as Social Security.
3. If you are unable to afford the repayments, you may want to explore options such as refinancing.
Consolidating or refinancing student loans can make life a lot easier as you have less payments to make. It can also lower interest rates. If some of the loans have higher interest rates, it also might be best to repay this debt on these loans earlier than others. If you are able to, paying off loans earlier and putting down more than the minimum can help you pay the loans off faster and without as much interest. Another option is enrolling in an autopay system in order to reduce the interest rates on loans.
Overall, saving as much as you can or taking on a part time job on top of your regular job can help you pay off your student loans faster. If you stick to a standard repayment plan, you will also be on track to pay off your loans and become debt-free more quickly.