Want to manage your student loan debt efficiently from 2017?
If yes, then you are at the right place.
Don’t brood about the mistakes that you have made in 2016. Instead, try out these tips to control your student loan debt effortlessly without putting much strain on your paycheck.
- Calculate your overall debt
Whichever debt you are dealing with first, you must calculate how much you owe to your creditors or lenders. By doing this, you’ll get an idea of the amount of money and time you need to repay your debts.
As for student loan debts, most students have both federal and private student loans. So, you must calculate both of them to know how much you owe in total. It’ll help you chalk out a better repayment plan.
- Know the loan terms
Besides adding up your overall debt, you must keep a note of the terms of your loan. This information would help you generate a better payback plan, which averts penalties, extra interests, and fees.
- Make use of the grace period
Have you recently completed your graduation? If so, then take full advantage of the grace period (that is, the time given to you after which you can start making the loan payments).
The grace period differs from one loan to the other. For instance, Perkins Loan has a grace period of 9 months, while the grace period of Stafford Loan is 6 months. Start saving money now, so that you can pay back the student loan without stressing on your bank account.
- Choose a good payback plan
Don’t let your student loan debt payment upset other financial obligations. For that, you can choose a repayment plan like Income-Based Repayment (IBR), Pay-As-You-Earn, Public Service Loan Forgiveness, Teacher Loan Forgiveness, Perkins Loan cancellation, Federal Family Education Loan Program (FFELP) that suits your lifestyle.
These student loan debt pay off plans are easy on your wallet. Because they provide you a more manageable monthly payment depending on your current income. If you can’t keep track of your multiple loans, try out student loan consolidation. Or, take help of the Student Aid Bill of Rights to wipe out your student loan debts.
- Pay more than the minimum
Whenever you are making more than the minimum payment the extra amount goes toward satisfying your principal loan amount. The best way is to set up an automatic payment with your bank account.
Even if you can pay $20 extra per month, do it. Then, gradually increase the extra payment. It’ll help you repay the loan faster.
- Take up a job that offers student loan forgiveness
If you are about to start your professional life, pick up a job that provides student loan forgiveness. To get this type of job, you just have to meet the requirements. You must take advantage of it because it’s free money. Search online and you’ll get ample options like public service work, teaching, and so on.
- Invest extra money wisely
Never waste your dollars by making useless investments like a better car, a bigger TV, lavish parties, more exotic tours, and so on. I’m not saying that you don’t need it, but, your student loan debt is important too.
If you’ve got a pay hike recently, use that money to pay off your student loan debt. You can also work extra hours or take up a part-time job to get more money.
- Make adjustments in your budget
Are you trying hard to find extra cash to pay off your student loan debt? If so, then make necessary adjustments in your budget and free up some money to repay your student loan debt. For example, give up cigarettes and alcohol, stop visiting restaurants frequently, cancel cable TV, etc.
Avoid making useless expenses like visiting Starbucks regularly, buying branded and expensive things only, and more. In short, follow a financial diet unless you pay off your overall student loan debt.
- Get tax deductions and credits on student loan interest
You are eligible to get $2,500 tax deduction on the interest of your student loan. You’ll also get tax credits if you’re currently pursuing your graduation degree and paying tuition fees. Simply paying the student loan won’t give you any tax credit. Financially, tax credits will be more beneficial than tax deductions. So, before filing taxes, check out how much you can save on student loan interest deduction.
- Think of your life without student loan
You have to realize that student loan is not a good debt that you can keep. It won’t let your finances breathe unless you pay back the overall debt. The realization that you have to pay back your debt is important to become debt-free. So, visualize your life without the student loan debt and motivate yourself to repay the debt faster.
Paying off a debt is not so easy. You need to make some sacrifices to get rid of it. If you’re currently dealing with debt, try to make those sacrifices that’ll bring you out of this crisis, because “NO PAIN NO GAIN”.
Author’s Bio: Phil Bradford is a financial web enthusiast. His passion for helping people who’re stuck in financial problems has earned him recognition and honor in the industry. Besides writing financial articles, he loves to travel and cook. If you’re in need of financial help you can always email him at firstname.lastname@example.org.