Graduation means new opportunities for college graduates moving into their chosen career paths, but it can also be a time of increased stress as the reality of dealing with student loan payment and other financial issues stops being a far-off issue and becomes an immediate concern. While some programs help with loan repayment for those in certain careers, those students not qualifying for such programs can avoid sleepless nights and increased worry by following some of these tips of dealing with the early days of student loan repayment:
Know what’s coming
Students certainly should have reviewed the details of their loan when they signed up for them, but it never hurts to revisit that fine print again as it comes time to start repayment. What is the interest rate of the loan? Fixed rates might being a little more piece of mind knowing that interest rates won’t fluctuate like they do in variable rate loans. The more a student knows about their loan, the more they can plan for a type of payment plan, be it a standard repayment or income-driven plan. It also helps to know how interest accrues should a loan be put in deferment or forbearance.
Act on that knowledge
Once a student knows how their loan is set-up, they can make the best plan for attacking the balance. Setting up automatic payments helps make sure that loan repayment is never lost or adjusted based on changes in income. Establishing a set amount each month to automatically be deducted not only makes it easy to establish a monthly budget, but also help avoid late payment penalties. Many lenders give interest rate reductions for setting up automatic payments.
Keep debt in check
As with any budgeting, making sure to keep debt to a minimum is a large step in keeping stress out of life. Student loans can be a large portion of a student’s debt load for the first years after college. So before making large purchases (car, graduate school, etc.) students should make sure they have a strong budget plan that factors in additional debt while maintaining repayment of previous loan debt. Future debt can’t always be avoided unavoidable, but making smart decisions about money can help reduce the stress of new debt and make it more manageable.