Debt is always a problem. This resonates pretty well with any recent graduate who is usually mired in student loan debt. Luckily enough, there are a couple of things you can try to do in order to get rid of it faster. Follow these tips and you’ll be able to cope with the high costs of education and the financial burden that comes with them. Consider the following tips:
Use Your 6-month Grace Period
When you graduate college, you won’t need to start the payment on your student loan immediately – you’ve got a “grace period” of half a year. This is great, isn’t it? With your payments postponed for 6 months, you can work towards securing higher income or finding some way to get situated for a long repayment. This will help you avoid default right out of college.
Get a Second Job
The more money you have, the more you’ll be able to pay on a monthly basis. Consequently, the faster you’ll get out of debt. Additional income is more than welcome when you’re in debt, so think about it.
It doesn’t have to be a full-time job. Two of those would be a hellish schedule. If you’re good at something, sell your services as a freelancer. This will put some more money in your account.
Pay Off the Most Expensive Loan
If you do so, you won’t risk getting in even more debt because you’re falling behind your repayment plan and you can’t cope with the interest rate. The most expensive loan should be paid first. This means that you should pay off the loan with the highest interest rate while making the minimum payment on the other loans. After paying that one off, then move on to the next one and repeat the process. This is known as the debt avalanche method.
Talk to Your Lender
It’s not the end of the world if you feel like you can’t afford the loan. Perhaps you’re having some health issues or anything else that jeopardized your capability of making your monthly repayments.
In this case, do not pretend everything’s good, because it certainly isn’t. Talk to your lender and let him know the reasons why you’ve fallen behind the schedule. If you do so, you might actually get a postponement.
If you don’t, you’ll accumulate financial penalties and you’ll drown yourself in more debt. If you’ve lost your job or you’re suddenly earning less than you used to, you should check out the IBR (Income-Based Repayment).
Student debt is scary, no one can deny that, but it’s totally manageable if you have a good financial behavior and you have at least some minimal knowledge on how you can speed up the process of repayment.
Hopefully, you’ll use these 4 tips we’ve given you and you’ll get rid of the debt a lot sooner than you would’ve by just sticking to the repayment plan and making no mistakes in paying it quicker.