If you are a recent college graduate, congratulations! In addition to your shiny new degree, however, you may be facing repayment of your student loans. If so, you aren’t alone; getting an undergraduate or graduate degree is an expensive proposition.
Tips for simplifying your payment process to reduce stress
If you feel overwhelmed when you think about the need to repay your student loans, read on for some strategies that can help you manage and pay down college debt faster:
- Consolidating or refinancing loans. It is not unusual to graduate with many different types of student loan debt, including a mix of subsidized and unsubsidized loans, PLUS loans and private loans. While consolidating multiple student loan balances into one new balance will not do anything to lower the amount you owe, it can simplify your finances and make it easier to attack the balance with one payment and one due date each month.
If you took out private student loans (directly from a financial institution), look into whether you can refinance those loans at a lower interest rate. Doing so will save you money over the life of the loan. And, if you can afford to pay more than the balance due each month, you can watch your balance disappear even faster.
- Paying off your most expensive loans first. If you don’t consolidate, then pay attention to the various interest rates on your loans and make a concerted effort to pay the most expensive loan (the loan with the highest interest rate) first. When that one is paid, take the money you were putting toward it and put it toward the loan balance with the next highest interest rate, and so on.
- Being disciplined about your finances. Making smart financial decisions and avoiding the need for instant gratification by buying those new shoes you don’t really need or that daily latté will go a long way in helping you both lower your student loan balances and set the foundation for your financial future. If you can pay an additional $100, $50 or even $25 each month on your student loan balances, you will be surprised at the difference it will make over the lifetime of the loan.
Paying student loan debt on time, or faster than agreed, is a great way to help build your credit and will help demonstrate your responsibility when you want to apply for a mortgage loan or start a small business.
To learn more about the products and services Mercer Savings Bank provides, contact us today in Celina, Ft. Recovery or Greenville.