As a new college graduate, you’ll typically have six months before you’re required to start paying back any student loan debt. Even if you’ve still got some time before graduation, it’s not too soon to begin thinking about your student loans and coming up with an effective repayment plan. As you begin to pay back your student loan debt, keep the following tips in mind:
Begin paying as soon as possible
Although you’ll have a grace period after graduating before you’ll need to pay back your student loans, that doesn’t mean you can’t start repayment sooner. This can help ease the financial stress that often comes with paying back student loan debt, and can also help to lower the overall amount you owe. If you just started college and you just took out your student loans, it can be tempting to wait four years before thinking about that debt again, but imagine if you got a big head start right now. Wouldn’t it feel great to know that you’ll finish paying off your debt a few years sooner?
Know what your minimum payments will be
You may already have a budget, or you may be creating one for the first time after you graduate. Either way, it’s important to structure a budget that will make room for your new monthly student loan payments, so figure out what that amount will be ahead of time. If you have multiple student loans, you may be able to roll each payment into one larger minimum payment. By creating your budget before repayment begins, you’ll know if there are certain things you need to cut down on or get rid of in order to comfortably afford your payments. Bear in mind that it can take some time to get a new job as a recent graduate, or you may not make as much as you anticipated. Your budget should focus on what your current income is, and not what you expect it will be in a few months. This can help better prepare you and ensure that you will be able to pay back your student loans.
Always pay on time
In addition to knowing what your minimum payment amount will be, you’ll also want to take note of what time of month your payment will be due. It’s essential to never miss a student loan payment, because doing so can cause your interest to increase. If you fall too far behind and default, you face other potential consequences, so be sure to always make timely payments. Set a reminder on your phone, enroll in automatic payments, or pay early on the 1st of each month to ensure that you don’t miss a due date.
Consider an automatic debit
One way you can make sure you don’t miss a due date is by enrolling in an automatic debit, which is an option that most lenders will offer. You only have to set it up once and you’re done; your monthly minimum payments will be deducted from your bank account each month on the due date. If you’d like and you have the financial means to do so, you can set up the payments to deduct more than the minimum. Not only does this ensure that your student loan bills will always be paid on time, but you may receive other advantages as well. For example, some lenders may offer to slightly lower your interest rate for enrolling, which can help you to save a lot of money over the life of the loan.