Student loans are good, but you need to be also aware that too much student loan debt can cost you painfully in near future. A student, who completed his graduation in 2009, having approx $30.000 student loan debt stated that, “ I wanted to get rid myself of the burden quickly. That anxiety gave me this laser focus to pay off that debt, I just found that fire and stuck with it.” Yes ! It's a fact. According to the survey, 7 students in 10 have student loan debt after completing studies. And after graduation, the big question is how to pay off the huge student loan debt. Remember, student loan is a good financial instrument that can help you but, you should pay off the obligations on time. Else, you may not reach your other financial goals.
Make sure that you take measured steps before taking out student loans. Here are some ways in which you can eliminate your student loan debts and breathe free.
Budget is not only important for loan repayment, but also it is very essential part of your overall financial growth. Once you follow a proper budget you’ll be able to save some money and it helps to pay back your student loan debts. However, you need to follow a realistic budget and stick to it.
If you’re still in the grad school, you’re allowed to defer on your multiple student loans. Thus, you can ask your lenders to postpone the repayments until you get a full time or a part-time job. As you get monthly income from your job, you can repay the loans to your lenders.
If you only pay your monthly payments, the loan payment duration will a take long time to dissolve. And, you need to pay more interest. So, try to make big payments to lower the principal balance. Moreover, making frequent with big payments can reduce the interest rate as well. So, if possible you might take the advantage of this option.
If you’re still a student only and don’t have any job, you can also look forward to lower your monthly payments by extending the term of the loan. Though you may end up paying more on accumulated interest rates, this option could get you over a hump for the time-being. A student loan consolidation program could help you with your student loan repayment.
All graduate and professional students can easily apply for low-cost Stafford loans. This way you can save enough money on your loans and by obtaining cheaper loans, you can secure lower interest rates and monthly payments. While you get yourself a student loan, make sure you shop around so that you know the best rates that are available in the market.
You can even consider debt consolidation and combine your monthly payments. You can either go for private or federal debt consolidation depending on the kind of loans that you’ve taken out. Both the process of consolidating debts are different and you have to know the benefits of each option.
Loan repayment options are best to pay off student debt obligations. There are many types of student repayment options available such as: standard repayment, graduated repayment, extended repayment, loan consolidation, income based repayment, public service loan forgiveness.
You can take advantage of the SECURE (Setting Every Community Up for Retirement Enhancement) ACT and withdraw from your IRA before 59 1/2 years of age, without paying any penalty, if you are a first-time home-buyer or have to pay for college. You won’t have to pay a 10% penalty on the withdrawn amount.
As per the rule, it has to be used for paying tuition fees, buying books, or any higher education expenses for yourself, your spouse, your child, or grandchild. This is intended mainly to increase your retirement savings.
However, you need to be more careful while living your student life. Try to stay within your means, as every financial mistake has its effect on your credit score. Don’t take wrong steps and hurt your credit score as this might mar your future job prospects.