We’ve finally made it! We beat the apocalypse! And 2013 is just hours away! Bring in the New Year by making a commitment to repay your student loans. These 10 simple tips will help you stay on target.
1. Make On Time Payments
Save yourself time, money and stress, as well as saving your credit and your future by making on time payments. Also, you may be eligible for loan forgiveness after a certain number of years if you always pay on time. Try setting calendar reminders or using an auto pay feature through your bank in order to keep yourself organized.
2. Examine Your Repayment Plan
Are you on the right plan? Or is there a better one for your financial situation? Do a little research into what kinds of plans are out there to find the one that best suits you. Looking into Income-Based Repayment is a great place to start.
3. Know Your Loans
You don’t want to just be blindly sending in money every month. The more you know about what types of loans you have, the better equipped you’ll be to manage them.
4. Stay On Budget
Start by knowing how much you need to spend each month on necessities and then complement it with a budget for luxury items. The key to staying on budget is creating one you’re willing and able to follow.
5. Reduce Your Principal
Sending in a little extra on monthly student loan payments whenever you have a little cash to spare will help to reduce your principal. This will cost you less in interest payments over the life of the loan.
6. Check Your Credit Report
There is a lot information about your personal finances to be found in your credit report. Knowing where you stand credit-wise will help to figure out what you need to do going forward, including avoiding old mistakes, in order to build good credit.
7. Start Saving
Every little bit counts, so when you find you’ve gone under budget, don’t just funnel it into the luxury column, put it into a savings fund. Even if it’s only a little at a time, it will add up and also get you into the habit of saving; just like any muscle, you have to work it to make it strong.
8. Learn About Personal Finance
This will start to happen naturally if you stick to some of the above resolutions like informing yourself about your loans, doing a credit check and budgeting, but there’s even more to learn. Consider a class on personal finance, which will be worth it in the long run. Also, get intimate with tax breaks on your student loans.
9. Know Your Spending Habits
Specifically, you want to be sure to know your weaknesses. Is it hard to resist buying new shoes, catching the latest new flick or buying the imported olive oil? Whatever your Achilles heel, try to find a healthy balance of restraint and indulgence. You’re dealing with your inner child here, so you don’t want to be either too harsh or too lax. Allocate a reasonable proportion of your budget for your guilty pleasure and then thoughtfully choose how to spend it.
10. Shop With Cash
You can build credit using your student loans themselves. For the rest of your bills, try to avoid paying with credit so you aren’t saddled with the accompanying interest payments.
As much as you can learn on your own, dealing with student loans and finding all the loopholes is complicated; if you’re still struggling, don’t hesitate to contact the experts for help managing your debt.