3 Tips to Conquer Your Student Debt
by Rachel Jacobson, Personal Banker
Student loan debt can feel overwhelming and confusing for many borrowers. Most are in their late teens or early twenties when they enter the world of student loans and understanding some of the vocabulary and terms can be daunting.
Things only get more confusing after graduation, as loans become due, and repayment begins. The tips below can give you the confidence you need to gain control of managing your student loan debt and get you on the road to conquering repayment.
1. Know the Terms
Since loan documents can be wordy and full of legal jargon, it’s a good idea to read (and reread) them, particularly the promissory note, so that you understand the terms of your loan. Is there a grace period between graduation and when your repayment starts? What is your repayment period? What is your interest rate? These are all questions that your promissory note will answer. Write the answers down and store them with your documents so that when you need to go back and check you can easily find them. When you know these details, it is easier for you to keep track of when and how your repayment will begin.
2. Pay the Loans with the Highest Interest Rate First
It may seem like you should always pay the smallest loans off first, however; the best way to save yourself interest overall is to focus on the loans with the highest interest rate. This will ensure that you are paying less in interest and more towards principal over time. Make sure you maintain the minimum payment across all your student loans, and then pay extra on the loan with the highest rate. Additionally, making extra payments on your loans is another terrific way to pay them down faster—and to save yourself from future interest
3. Explore Repayment Options
Most public student loans will have multiple options for you at repayment time. These can range from the deferral of loans to income-sensitive plans to outright forgiveness. Your loan provider will likely have information online about which plans they offer as well as tools for you to determine which plan is best suited to you. Knowing your options for repayment is the most fundamental step to ensure the successful payoff of loans.
Student loan debt can be a large source of concern for people of all ages but taking control of your finances and understanding your loans will put you in a much better position to conquer your student loan debt.