Considering A Student Loan? Have A PLAN
Rather than letting yourself get overwhelmed with debt or putting all of your expenses into credit card bills that you cannot pay, manage your finances well and make the most of your income each month. Read this article for tips on how to use your personal finances in a beneficial manner, and get that student loan paid off as soon as possible.Tip 1: Have A Plan
If you want to get an education, first look for ways to pay for it without applying for a loan and before you enroll. You could start a 529 plan, which is basically, a savings account for education, or apply for financial aid before you consider taking out a student loan. A student should always consider every option before taking out a student loan. Grants, scholarships, and savings funds can be great ways to pay for college. Student loans will saddle you with debt and can lead to a shaky financial future, should you default. Plan ahead and pay for college wisely.
Tip 2: Include Your Student Loans In Your Budget
When you are graduating from college make sure that you contact your student loan providers to make sure you know what your financial obligations are in relation to paying your debt. Work them into your budget every month and do what you can do pay down your student loan debt when you can.
Tip 3: Consolidate Multiple Student Loans
If you have more than one student loan, consider consolidating them. Consolidated loans can be locked in at a low interest rate, often lower than the interest rates on your original loans. You also have the option of extending your loan payoff period if need be. Contact the agency that holds your student loans to see if you qualify.
Tip 4: Long-Term Planning
Don't forget to think about the future in your financial plan, you may want to consider things like debt investment opportunities. If you have a student loan at 2% interest but you can get a 2.75% savings rate in a bank account, it makes more financial sense in the long run to make the minimum monthly payments, while saving up a lump sum to pay it off entirely. Coversely, any debt with an interest rate higher than a savings interest rate should get priority.
Tip 5: Avoid Unnecessary Debt
Be very careful when you are taking on more debt. While some debts like mortgages are acceptable, it is not wise to amass other debts. For instance, if you are considering a home improvement project you may want to save for it instead of taking on an additional loan payment.
Tip 6: Choose Student Loans Wisely
Though most people consider student loans as "good debt", they can easily turn into a nightmare. Don't take out loans without knowing what sort of career you'll be after, and what your employment prospects might be. Otherwise, you may find yourself buried by your so-called good debt. If you can't afford college without them, consider taking classes at your local community college.
Tip 7: Paying Off Your Loans Quickly
Use an automatic payment plan when you begin to repay your student loans. Most lenders offer significant discounts for those who opt to have payments deducted electronically every month. This also ensures that you do not incur additional charges or late fees, if you forget to make your payment! One of the first debts you have to deal with on your own is likely going to be your student loans. When you get out of school, take the time to establish a payment plan for your loans. Don't just stick to the minimum monthly payments set by your lender. Set a deadline for paying off your loans and do your best to meet it.
Make a plan to pay off your student loans as quickly as possible. For about half the time that your student loans are in repayment, your payments are going mostly towards interest. The sooner you pay it off, the less you will pay in the long run, and better your long-term finances will be.
Of course, every student has his or her own circumstances and situations. But the WISE student will always know exactly what their goals are, and will always be determined to stick to a plan of action. But of course, sometimes plans require altering- things change, and often times we are required to adapt to these changes. Having a plan does not mean being rigid and unmovable, it simply means to have a general idea of how you are going to proceed.
