If you are a student or the parent of a student, student loan payments may be on your mind. There are very few graduates who don’t have student debt to be repaid after graduation.
Fortunately, there are ways to make student loan repayments more manageable and put you in a better position to service your loans.
This article offers student loan advice, tips, and shares strategies to help you budget while still a student to save money for loan repayments.
Make Repayments Easier
To make repayments easier, there are three possibilities to consider when it comes to student loans to help you avoid bearing the burden for long.
US Department of Education – Income-Based Repayment
If you are a US resident, there is a great possibility that your federal student loan is eligible for one of the US Department of Education income-based repayment plans.
The pros of an income-based solution include the fact that your monthly repayment is immediately lowered, you are not forced to repay more than you can afford, and you might qualify for loan forgiveness after 20 to 25 years.
However, the plans also come with negative aspects. Generally, your repayment will be extended until loan forgiveness. This will lock you in for repayments for 20 to 25 years. The payments will also increase as your income increases.
Consolidate Your Student Loans
If you don’t qualify for an income-based federal repayment plan, look at getting your student loans consolidated. With consolidation, your payments could be simplified as you have fewer payments and due dates per month.
The idea is to lower your monthly payments to an amount which is less than your original loans’ combined payments. However, although the immediate repayment is lower, your repayment period will be extended, meaning that you will pay more interest over the life of your loan.
Not all US institutions offer student loan consolidation, so be sure to do your research to find out if this is an option for you.
Refinance Your Student Loans
Refinancing is similar to a consolidation, except a refinancing seeks a lower interest rate as well as a singular payment and longer term. The pros of refinancing include a lower interest rate, a lesser monthly payment, and having space to save money over the long term.
Refinancing federal loans through a private lender might also eliminate the opportunity for deferral, forbearance, and income-based repayment options.
Save While Studying
Whether you have been successful with the rescheduling of your student debt or not, you can save money while you are a student by managing your finances well. As a student, the responsibility of budgeting on your own could be difficult.
Fortunately, there are apps available to assist you. They can help to monitor your bank account, credit cards, and loan payments from a mobile device. These apps offer a manageable and convenient way to make you aware of your day-to-day spending.
Budgeting Applications
Mint is a free app that combines all your financial institutions into one platform. With this app, you create a budget for yourself and manage your spending.
With the free app Digit, you automatically get money to spend every few days which can help keep you from overspending. The app automatically withdraws a small amount of money from your bank account every few days and deposits it into a separate Digit account for you to use.
Conclusion
The options discussed in this article can help you manage your student expenses while studying and make repayments of your student debt easier and less costly over time.