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What's the best way to approach student loan payments after graduation?


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Bill’s Answer

Veronica - Student loan debt or credit card debt are the two major debt types that you want to get paid off as quickly as possible. Car loans & mortgages are important to pay off as well, but reality is these are two types of debt that everyone needs to have. Again, student loan & credit cards are the excessive debt you want to eliminate.

Ensure you have a budget and are staying within that budget and NOT taking on excess credit card debt. Buy what you need and pay it off monthly. It's amazing how much extra the interest on credit card debt can be and how long it will take you to pay it off as the interest rates are HIGH.

Maintain regular payments always making at least the minimum, but know this isn't going to get rid of the debt anytime soon. You are going to need to make additional payments on top of the minimum to get the debt down. Look to add bonus money, birthday and holiday gift money to help reduce the debt. While if feels like you are NOT buying yourself anything by spending your birthday & holiday money on debt, you are buying yourself "Financial Freedom" which will payoff for you in the long run.

When you get to the point of making that final payment, you'll be so happy with yourself and you'll feel such a relief.

Good luck and stay focused on your financial freedom.

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Luiz’s Answer

Hi Veronica
There are at least two main strategies to approach loan payments.
First of all you need cut the budget. We normally don`t understand that if we have a expense for months, or even, for years, and if this is not fixed (like rent, for example) how we can cut the same of our life. The idea is cutting even it means "self-sacrifice".
The other way is refinancing your debt. By accessing internet at 09/19/2020 I watched a site which shows several kind of lenders and their rates. I think it would be useful do access https://www.credible.com/blog/refinance-student-loans/pay-off-student-loans/.
Good Luck!

Luiz recommends the following next steps:

budget
Saved!

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Simeon’s Answer

It's worth it to do research about student loan forgiveness programs. For instance, teachers that serve five years in underserved areas can sometimes qualify for student debt relief. Don't just pay the minimum payments on the debt. Pay down the highest interest loans first and snowball them down by interest rate level.

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Chris’s Answer

Hi Veronica, I had student loan debt after college and I made that the first bill I paid monthly. As my income increased, I used the extra money to accelerate the payments so I could pay the debt off early. This enabled me to use that budgeted money to save and purchase my first house. It will take time, but it was totally worth it! Hope this helps.


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Michael’s Answer

Hi Veronica,


This is a good and important question. I had a bit of loan debt coming out of college and my goal was to reduce it down as quickly as possible. Like any other amount of debt, your aim should be to zero it out as quickly as you can. Treat your loan as a bill, an an expense, and put it in your budget. Calculate the payments you will need to make on it, determine how long it will take, consider the interest of the loan, and stick to that payment every month until it is paid off. During times when you have an increased cash flow, use some of that extra to pay the loan down.


Paying off a loan whether it be for school, home, or car, needs to be dealt with appropriately, on time and you should have a payoff goal that fits into your monthly budget. Ultimately, stick to your budget!


Thanks!


Mike


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Kelly’s Answer

This is a great question Veronica! Regardless of the type of debt (home, auto, student loan, etc.) the most import thing you can do is to protect your credit by making the payment on time each month. My second piece of advice would be to create a budget of your monthly income and expenses and as you can afford it, try to pay more than the scheduled payment to pay the loan off faster. You would be surprised at how much of an impact an additional $50, $20 or even $10 a month can have on the amount of time it takes to payoff the loan. Good luck to you!


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