Student loan debt is a challenge for many young adults. Not only can it be difficult to make payments when you are just out of college and looking for a job, it can continue to weigh on your budget even after you are earning a steady income.
Paying off your debt is the best way to prevent problems, but there are a few other things you can do to help your cause:
Do not Wait Until the Grace Period Expires
Everyone with a student loan is given a grace period after graduation before any payments are due. While this can offer you a bit of relief, you should begin making payments as soon as possible, even if your grace period is still available. This is because interest begins to accrue on the loan as soon as the loan is received. The sooner you begin your payments the less the loan will eventually cost you.
Use Autopay
Setting up autopay for your student loan helps you avoid missed payments. Additionally, it can save you money – many lenders offer a discounted rate if you schedule automatic payments.
Pay Off High-Interest Loans First
Make sure your loans are organized and you know how to prioritize them. If one loan has a higher interest rate than another, work on paying that one off first. It can also help to refinance high-interest private loans and consolidate federal loans.
Take Student Loan Debt Seriously
It is tempting to brush off student loan debt and not think of it is as a financial priority, but you are making a big mistake. Many financial experts believe it should be among your top three financial priorities, preceded only by retirement savings match programs (401K) and emergency savings.
Aim to pay off your student loans within a decade after graduation. The average person still has student loan debt in his or her 40s or 50s, but if you are able to pay off the debt by your 30s, you are ahead of the game and you have saved yourself a lot of money.
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