Student loans help us achieve our educational and career goals, but repaying them can be challenging to integrate into everyday finances. Once your studies are finished and your grace period is over, it’s time to pay back the money that has helped get you where you are. The road to repayment can be long and filled with potholes. To make this transition period easier, here are three ways to save on your student loans.
1. Choose Your Repayment Plan Wisely
Not all student loan repayment plans are the same and there are a number of plans to choose from. A typical repayment plan for student loans is a standard plan, requiring fixed payments for a period of up to 10 years. However, if you are a low-income worker, there are other repayment options adjusted for your income. These plans, which take place over a longer time period, include income-based repayment, pay-as-you-earn repayment and income-contingent repayment. Do your research and check out your options before selecting a plan that works for your financial budget.
2. Consolidate Your Loans
If you have multiple student loans, consolidating them groups them into one monthly payment instead of multiple separate payments. When loans are consolidated, they effectively become a new single loan with an adjusted repayment time frame. The interest rate becomes the average of the interest rate of each loan, and most federal student loans can be consolidated easily.
3. Make Every Payment on Time
The sooner you make each payment, the sooner you will be relieved of your debt. Accidentally extending the length of your repayment period will result in increased interest rates and larger fees to repay. Once you have decided which repayment plan is right for you, figure out the best way for you to make payments. In addition to checks and money orders, most student loan servicers accept online payments, smartphone payments, phone payments and direct debit payments. They seek to make your payments routine and regular.
Now that you know the basics about student loan repayments, the world is yours! Lots of people struggle to pay off their education, but with a little knowledge and planning, the repayment process will feel easier.