With the cost of college tuition increasing every year, student debt is becoming more crippling to college graduates. In the United States alone there is over $1.57 trillion in student loan debt outstanding. The average amount of student loan debt per person is over $37,000. While a college degree is supposed to help you obtain a high salary job, it is difficult to balance student loan payments with other expenses such as rent, car payments, and bills. Keep reading for several tips on how to best manage your college debt!
Calculate Your College Debt
Start off by totalling up your principal and interest that you owe to your student loan lenders. By knowing how much you owe overall, you can begin to develop a plan to tackle your debt. Explore your different options including loan consolidation and student loan forgiveness. The quicker the debt is paid off, the quicker you can be free of the college debt burden.
Pay College Debt Automatically
Set your accounts up for automatic payments to ensure you are never late! Many private student loan companies have hefty fees for late payments. Some lenders also provide small discounts for automatic payments, so be sure to check if you could be saving money on your loan repayment. Automatic payments ensure you pay on time, which can help boost your credit score for consistent payments.
Know Your Loan Terms
Be sure to read through your loan terms to understand your repayment period, whether you have varying interest rates or not, and what different penalties there are. Some private loan lenders have prepayment penalties that charge you a fee for paying off your loan before the end of the repayment period. Learn all the terms of your loans so you can create the best repayment plan for you.
Avoid Large Expenses
While repaying your college debt, try to avoid taking on large expenses such as a car payment or a mortgage. These payments will take away from the money you could be putting towards your student loan debt. You want to pay off your college debt as soon as you can!
Talk to a Financial Advisor
A financial advisor can help you plan out a budget specifically for your income level and financial standing. Your advisor also may be able to find the best loan consolidation options and whether or not you qualify for student loan forgiveness. Either way, an advisor can help you pay off your college debt as quickly as possible!
Student loan debt can be crippling if you are not proactive with your repayment plan. Firethorn Wealth Partners is ready to help you pay down the burden of college debt. Give us a call at 706.426.4243 or schedule an appointment here to get started!