Decades ago, a diploma meant future opportunity. Today’s news often points to the fact that going to college means accruing debt. It’s a blow to those who wish for higher education and a brighter future. Student loans help bridge the gap between goals and reality. But rather than sweat student debt, here’s how to pay it off without breaking your back.

Know and Plan for the Grace Period

A grace period is the time between graduation and the first payment. It’s necessary to know the date for proper planning. Usually, grads get six months for federal loans while the first payment for private loans varies.

Pay Back More Than the Minimum

College grads don’t have a lot of money. Plus, many are in debt. It’s understandable why one would choose the minimum repayment option. But, paying more per month helps address the overall principal. The longer it takes to pay, the more interest is associated to the overall cost. If you have a hard time finding the added funds, establish an automatic withdrawal process with your lender.

Do All of the Calculations in the Beginning

Before making your first payment, know what you owe and how long it’s going to take to pay all of it back. From there, you’ll know how much money you need to pay each month. Then, you can begin thinking of ways to pay more along the way and bring the projected payback date closer. Direct lender details vary from those associated with government loans.

Business money

Reconsider Refinancing But Approach with Caution

It’s common for grads to have debt and or need to pay off more than one loan. Refinancing provides an opportunity to lower the level of interest so grads can pay off the principal faster. Be cautious, however, in reading a provider’s terms and conditions. For example, some may offer an initial period of low interest with a higher interest coming in time or because of missed payments.

Use That $20 Bill You Found in Your Coat

At times, we come across good fortune that takes the shape of inheritance, lottery winnings, a lucky night at the casino, etc. Rather than splurge on a vacation, new shoes, or a higher quality car, put the funds toward debt. Being in debt, technically, means you owe money you didn’t or don’t have. So, it makes sense to pay it back when you do have it, especially when it’s unplanned. It takes tremendous discipline to roll a night’s winnings into the other hand as you write a bigger check to your lender, but it makes a lot of sense.

Accept a Job Associated with Debt Forgiveness

Some professionals, such as public service workers and teachers, are pardoned and do not have to pay a portion of their debt. Terms are stringent so a person may benefit from the assistance of a lawyer in ensuring they meet all terms. Also, forgiveness is often associated with higher interest rates and income requirements. A fired employee, for example, will be responsible for greater interest charges.

Donate Your Tax Returns and Raises Toward Debt

The end of tax season brings returns for some, who grow excited at the thought of ‘extra’ or ‘found’ money. It’s an exhilarating yet naive action to spend the tax refund. Similarly, if job performance is satisfactory, many get raises throughout their tenure. Instead of making a one-time purchase or find a larger home or apartment, steer the added income toward existing debt.

Find Creative Ways to Trim the Budget

Do you need to buy coffee at the cafe or can you make it at home? Do you need to pay for cable or do you need a television at all? Can you move to a smaller apartment without interrupting your well being? Find creative ways to save money. Immediate saving is easy; opt for the small rather than the large coffee. Finding ways to save all the time, however, necessitates creativity or an interruption in routine (Stop going to the cafe for coffee.)

Search for Ways to Lower the Interest Rate

Some lenders will decrease the interest rate. For example, you may get a lower rate for opting out of snail mail. Or, you may get a decreased interest rate for establishing automatic drafts from a bank account. Be attentive as not to miss important opportunities.

Don’t Think It’s Helping You

While it’s necessary to stay in good standing with your lender and pay off the loan as agreed by terms, student loan debt is not ‘good’ debt. For example, it’s not the kind of debt that helps improve a credit score, though being negligent in paying can harm a score. So, while it’s a necessary inconvenience to have the debt, don’t be forgiving in wanting to get rid of it as soon as possible. This post was provided by Keira Bevan, an accountant, is always on the search for new money tips and insights. When she finds them, she loves to share them on a number of personal finance blogs. http://www.mscareergirl.com/2017/07/05/stop-sweating-student-debt/

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