Student Loan Planner: As a student, have you borrowed money before for school purpose? If yes, then note this. You may be concerned on how best to pay off your student loans. The short answer is this. There is no magic way. However, there is a better way.
But you have to know this. There are things you should do to make paying back education debt easier. In 2019, students loan debt reaches an all-time high of 1.41 trillion. As such, know that you’re not alone. However, who is or what is a student loan planner?
Student loan planner is looking at helping student pay their loan debt. This is as a result of the above alarming student debt figure. In this article, you shall read about the necessary steps to take in paying your student loan. It’s important we begin by knowing what is who is a student loan planner.
About Student Loan Planner
A Student Loan Planner is an educational website. Also, it is a student loan consulting business that has now created plans for over 2,500 clients. It claims to have saved students over $120 million.
Student Loan Planner Advices on Paying Off Loan
The following are some tips on how to pay off student loan:
1. Know What You Owe
The first step in repaying student debt is knowing what you owe. This is according to student loan planner. If you haven’t done this yet, take time to figure out:
How much you owe, in total, on all your loans.
Also, which student loan servicers you owe money to and how much for each loan.
Which of your loans are federal and which are private.
The minimum monthly payment for each loan.
And, the interest rate for each loan.
Once you’ve done this part, you can move on to the next step. This step is choosing a repayment plan.
2. Evaluate Student Loan Repayment Options
How you repay your loans depends on three things:
The type of loans you owe.
How much you can afford to pay.
And your money goals.
There is a range of student loan repayment options to consider. You might look at an income-driven repayment plan. That is, if you need flexibility and you owe federal student loans. There are several choices that calculate your monthly payment. This is based on your income and household size.
Income-driven repayment plans can offer loan forgiveness after a set number of years. However, any forgiven loan balance may be treated as taxable income. On the other hand, if you want to repay your loans as quickly as possible, you might want to stick with a repayment plan that has the shortest term.
The trade-off is that you’ll have a higher monthly payment. Please note this. The best way to evaluate loan repayment options is to use a loan repayment calculator. Such as the one offered by the Department of Education. Please take these advices by student laon planner serious.
3. Use the Grace Period to Your Advantage
This is another important student loan planner advice. The grace period is the time frame in which you aren’t required to make payments on your loans. With federal student loans, the grace period typically lasts for the first six months. This is after you leave school.
Whether you have a grace period and how long it lasts with private student loans depends on the lender. With private loans and unsubsidized federal loans, know that interest is still charged during your grace period. And will be capitalized—added to the total amount you owe—after the grace period ends.
One way to make the grace period work for you is to make advance payments against your loans. Paying down some of the principal means less interest that accrues later. At the very least, try to make interest-only monthly payments in the grace period to cut down on what you owe.
4. Try Paying Your Loans Automatically
This is another important student loan planner advice. Scheduling your loan payments to be deducted from your checking account automatically each month means you don’t have to worry about late payments, which could hurt your credit score.
You could also score some interest rate savings if your lender offers a rate discount for using autopay—federal loan servicers and many private lenders do. The discount may only be a quarter of a percentage point, but that can make a difference in how quickly you pay off the loans over time.
5. Try to Pay Extra and Be Consistent
It is important you note this. One thing that can slow down your student loan payoff is paying only the minimum due. If you’re able to pay extra, you may want to target one loan at a time.
While paying the minimum on everything else. The question is, will you adhere to this student loan planner advice?
6. Apply ‘Found Money’ to Loan Balances
This is another important student loan planner advice. Please take note of this. Found money is that money that isn’t budgeted as part of your monthly income. It is another way to gain traction with student loan repayment. Found money includes:
Annual salary bonuses.
Income earned from a side job.
Cash gifts you receive for birthdays or holidays.
You can apply these amounts to your loan principal to take out a chunk of your debt in one go. Other opportunities to use found money to pay down loans quickly include:
Inheriting money from relatives.
Or, receiving a settlement as part of a lawsuit.
7. Give Forgiveness and Reimbursement Programs a Shot
This is another important student loan planner advice. Public Service Loan Forgiveness is designed to offer student debt relief for students who pursue careers in public service.
You make a set number of payments while working in a public service job and the remainder is forgiven. Please take note of this information. If you don’t qualify for loan forgiveness, you may be able to get help with your student loans through your employer.
Also, you can talk to your HR department about whether student loan reimbursement is available as an employee benefit. Also, and what you need to do to qualify.
8. Try Paying Biweekly
This is another important student loan planner advice. Another method you can try with paying off student loans is switching from monthly to biweekly payments.
Similar to making biweekly payments on a mortgage, this tactic results in your making one extra loan payment per year. You’ll need to talk to your loan servicer to find out whether automatic biweekly payments are an option, However, if not, you may be able to make additional principal payments at any time through your online account access.
The upside of making extra biweekly payments yourself, versus automatically, is that you can make the payments when it fits your budget and skip them if there’s a month when you don’t have the extra cash.
In a Nutshell
It is important you take note of the above tips on paying student loan. This is because, tackling your student loans proactively is key to paying them off sooner rather than later.
There are plenty of ways to manage your debt more effectively just as stated above. However, the worst thing you can do is nothing. Thus, if you find you’re having difficulty affording your federal or private student loan payments, don’t ignore the problem or assume there are no options.
Also, you can reach out to your loan servicers to discuss your situation. Also, try to create a plan to get back on track. Additionally, you can consult student loan planner.