Have you recently graduated from college and are now feeling the weight of your student loans? You’re not alone!
According to a recent CNN article, the average graduate in 2016 had $28,400 in student loan debt. That’s a lot of money to have to repay! But don’t worry, we’ve got you covered. Here are some tips to help make your student loan repayment journey a little less daunting.
- Know Your Loans
The first step to successfully repaying your student loans is to understand what you’re dealing with. Take some time to review your loan documents so that you know the details of your loans, including the interest rate, repayment term, and grace period.
If you have multiple loans, it may be helpful to consolidate them into a single loan. This can simplify the repayment process and potentially lower your monthly payment.
- Create a Budget
Now that you know how much you need to repay each month, it’s time to start budgeting. Review your income and expenses to see where you can cut back to make room for your loan payments.
If you’re struggling to make ends meet, there are several options available to help you lower your monthly payment. You can extend your repayment term, enroll in an income-driven repayment plan, or even defer or forbear your loans if you’re facing financial hardship.
- Stay on Top of Your Payments
Once you’ve created a budget and know how much you need to repay each month, it’s important to stay on top of your payments. Missing a payment can negatively impact your credit score and could even lead to default.
There are many ways to make sure you don’t miss a payment, including setting up automatic payments from your bank account or signing up for reminders from your loan servicer.
- Consider Refinancing
If you’re struggling to make your monthly payments, you may want to consider refinancing your student loans. This can potentially lower your interest rate and monthly payment, making it easier to repay your loans.
Many companies offer student loan refinancing, so be sure to shop around and compare offers before you decide on a lender.
- Seek Help if You Need It
If you’re struggling to repay your student loans, don’t be afraid to seek help. There are some resources available to help you get back on track, including student loan counseling services and repayment assistance programs.
Don’t let your student loans overwhelm you! Follow these tips to make repayment a little easier.
How to consolidate your student loans
If you’re struggling to keep track of multiple student loans, you may want to consider consolidating them into a single loan. This can simplify the repayment process and potentially lower your monthly payment.
There are a few different ways to consolidate your student loans, including through the federal government or private lenders.
- Federal consolidation
If you have federal student loans, you can consolidate them through the Department of Education. This process will combine your multiple loans into a single Direct Consolidation Loan with a fixed interest rate.
To be eligible for federal consolidation, you must have at least one Direct Loan or Federal Family Education Loan (FFEL) that is in repayment, in the grace period or deferment. You can consolidate both subsidized and unsubsidized loans, as well as PLUS loans.
- Private consolidation
If you have private student loans, you can consolidate them through a private lender. This process will combine your multiple loans into a single loan with a fixed or variable interest rate.
To be eligible for private consolidation, you must have at least two loans from the same lender with a balance of at least $5,000. You may also need to have a good credit score to qualify for a lower interest rate.
Before you consolidate your student loans, be sure to compare offers from multiple lenders to find the best deal.
How to create a budget
Now that you know how much you need to repay each month, it’s time to start budgeting. Review your income and expenses to see where you can cut back to make room for your loan payments.
If you’re struggling to make ends meet, there are several options available to help you lower your monthly payment. You can extend your repayment term, enroll in an income-driven repayment plan, or even defer or forbear your loans if you’re facing financial hardship.