After graduation, the student loan repayment process begins. If you are fortunate enough to land a well-paying job, the money budgeted for student loans may not matter much to you. For most people starting an entry-level position, every penny counts. It can be frustrating to think of the time and money spent on your education when you struggle to cover your bills.
Consolidating Your Loans
One way to make education debt repayment more affordable is by consolidation. The consolidation process combines your existing student loans into a single debt. During the consolidation process, you can extend the repayment terms. Repaying over a longer timeline allows you to make smaller payments each month. The consolidation process is straightforward. There is an easily accessible guide that allows you to review your options and make the smartest choice for your financial situation. By taking only a few minutes to familiarize yourself with the pros and cons of debt consolidation, you can free up a significant amount of money in your savings each month.
Build a Budget That Makes Sense
Repaying your student loans is part of the educational process. Some people receive significant help in paying for school, from family, through financial aid, or a combination of both. If you are one of those who graduated without any debt, or with an amount that is easily repaid on your current salary, consider yourself fortunate. For many students, seeing the amount they owe on their student loans is stressful. It is normal to be uncomfortable carrying a significant amount of debt, but keep in mind that this money allowed you to find the job you have. Using some of that money to repay your loans makes sense.
Don’t plan on budgeting so tightly there is no room for any fun. Instead, create a budget that allows you to cover your expenses and leaves a little extra for discretionary spending. At the end of the month, if you have money left over, apply it to your student loans. This allows you to pay extra when you have it but doesn’t trap you into an uncomfortable and impossible to maintain budget.
Accept the Process
Put in the time to find the best possible repayment solution for your student loans, whether it is through consolidation or refinancing, and then start paying. Don’t spend time analyzing the amount you owe, how long it will take you to pay off the loan, or anything else outside of your control. Making regular payments will reduce the amount you owe, but checking the remaining balance frequently is similar to checking your retirement balance frequently. It can seem like you’re throwing money away with not much to show for it.
Take time annually to look over your remaining balance and your budget. Ask yourself if you could do better. Maybe you get a raise or a bonus and decide to dedicate some of those funds to your debt. Perhaps interest rates drop significantly; it may be time to consider a refinance. You can remove the day-to-day stress of worrying about your student loans by taking control of your repayment plan and feeling confident you are doing everything to repay the debt at the most affordable rate.