When you look at the student loan obligations you have, the picture will likely be overwhelming. Student loans can be one of the most difficult financial situations you’ll ever face. The worst thing you can do is to approach your student loans nonchalantly. You need to be proactive in managing your student loans. Here’s what you can do:
Finding the Right Repayment Plan
1. Identify the payment plan that works best for you. Use our personalized decision tool to Find Your Savings Plan. Once you answer the questions, you will be able to find the payment plan that works best for you. Be careful because student loan payment policies are changing based upon federal legislation. Our experts at Student Loans Guy will keep you up to date on all of the latest developments.
Look Into Refinancing
2. Refinance your student loans. See if you qualify and compare lenders on our Refinance Options There you will find a number of refinance options. Whenever possible, select the least number of years as possible. This will lower your interest payments. Check out our Refinance Calculator to see how much you could save.
Make Sure You Take Advantage of the Auto-Pay Discount
3. Select the auto-pay feature. This will give you a .25% discount on your interest payments. It will also instill payment discipline that you may need.
Put Aside Some Extra Money for Your Monthly Payments
4. Adopt the Hamilton Challenge. Alexander Hamilton is featured on the ten dollar bill (and is the namesake of the blockbuster Broadway hit). The Hamilton Challenge is this: Reduce your socializing costs (eating out/drinking with friends) by $10/week. Then apply the $40 you save each month to an extra payment on your student loans. You will be amazed by how much this will reduce your total interest payments.
Loan Payments Can Come as a Gift
5. Put student loan payments as a gift request. Rather than having others concern themselves as to what to give you as a gift (e.g. birthday, Christmas), let them know that you would appreciate help in repaying your student loans. When you use this money to pay off a student loan, it reduces the principal and by so doing you will reduce your long term interest charges.
If you are smart about your student loans, you should be able to pay them off in a minimal time and this will reduce the interest you need to pay over time. Find out which repayment plan is best for you with our repayment decision tool.
This article was written in partnership with University Survival.