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5 Steps to Conquer Your Student Loans

Written by: Guest Writer

2 min read | Published: January 27, 2019

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For most students pursuing education beyond high school, the looming threat of student loans always seems to hang over decisions about the future. The good news is that steps you take now can help alleviate some of that stress and set you up for success as you build your career path.

1. Limit the amount you borrow

While you are still a student, it can be hard to conceptualize what additional loan money will mean down the road. This can be especially difficult if you have already borrowed a lot, making additional money seem somehow abstract in the total picture. If you don’t need the money to pay for your education and basic living expenses, pay it back on the loan balance. This will save you money and heartache down the road.

2. Choose an affordable repayment plan

It can feel overwhelming to think of the grand total of your student loans. It’s helpful to know that you won’t have to pay this back in a lump sum. Many loan providers allow you to base your monthly payments on your income after graduation. This ensures the payments will be manageable in your overall monthly budget. Sometimes, this even results in a monthly payment of $0 until you earn enough to afford more.

3. Pay more than the minimum

When you have the opportunity, pay extra on your student loans. This will often push out the next required monthly payment which can help if you get in a financial bind later and have to make less than a standard payment. Additionally, by paying the loan off faster, you reduce the total interest charges you’ll pay. Extra payments early on will save the most interest because you reduce the total balance for the remainder of the loan term. For example, if you pay an extra $100 on the loan, you’ll save interest on that $100 over the next 10 years (or however long it takes to repay).

4. Target loans with the highest interest rates

If you’re paying extra on your loans, be aware that not all loans charge the same interest rate. Each semester that you take additional loans, interest rates are based on that individual loan. Compare your rates and focus any extra payments on the loans charging the most. This will save you money in the long run and speed up your repayment period.

5. Celebrate incremental goals

Acknowledge when you’ve made progress on paying off your debt. It’s all about perspective. If you keep worrying about the total amount left to pay, it can feel burdensome. If you celebrate paying off portions, you’ll feel more in control and notice your success. Choose a percent of the total balance or a dollar amount that seems reasonable and celebrate when you achieve this goal. As you continue to pay your balance down, the goals will come more quickly.

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