Student Loan Repayment: How to Get Ahead of Your Student Loans
As we start to enter the last few months of this year, the impending reality of student loan repayment starts to set in for many borrowers across the country. After much debate over student loans and lots of confusion for borrowers, the time has come to make your repayment plan.
There are some helpful tools that the Federal Student Aid website has provided, like a handy student loan repayment calculator. But we’re here to give you some tips from our financial experts to help you get ahead of your student loan repayments.
Add an Extra Student Loan Payment To Your Budget
Student loan interest has officially resumed on September 1st. That means that while payments have not yet started, interest is generating on your current balance. Avoid paying more interest by starting your payments as soon as you can. If you, like others kept your payments going during deferment, consider adding an extra payment this month if possible.
We always recommend that you have a monthly budget, so look at your current budget and make a sound decision on where you can fit a student loan repayment into your current expenses. Even a small payment can make a difference.
Read: Financial Wellness Questions: How to Determine if You’re Financially Fit
Consider The Standard Repayment Plan
Your loan servicer offers differing options for repayment to lower your monthly payments. But consider the benefits of sticking to the standard repayment plan. The standard plan is a 10-year timeline to full loan repayment. This means less interest and a quicker route to loan payoff
The best way to approach your repayment plan is to first consider your income and expenses. If an income-driven repayment plan is needed in order for you to meet your budget, then go with the option best for you. If you are unsure of what your budget is, let us help!
Our financial health programs are free for all members and are a great way to connect with a financial expert.
Read: Why Financial Literacy is Important for Everyone
Enroll in AutoPay
Even though technically student loan repayment has not yet started, you can still enroll in autopay now. Your automatic payment will start on the official repayment date, which as of now is October 1st. Enrolling in autopay will give you a leg up and it will save you interest in the long run.
Enrolling in autopay automatically gives you an interest rate discount, saving you more money on interest and allowing you to pay off your principal faster.
Read: Budgeting Tips for Recent College Graduates
Find a Way to Increase Your Income
It’s no secret that increasing your monthly income would be a surefire way to be able to pay off your student loans. But how exactly do you increase your income? There are multiple ways and some are more simple than you may think.
Consider looking into part-time positions with companies like Shipt or Rover. These companies offer opportunities to increase your income in your free time through grocery delivery and dog walking or sitting respectively. If your time is limited, consider selling your gently or unused items or even monetizing a skill like writing or photography.
Nearly 37 million Americans will need to restart their monthly student loan payments in October of 2023. It’s a big change for many borrowers who will need to adjust their budgets to afford these new monthly payments, but we’re here to help you stay on track to your financial goals.
Your financial wellness is important, so consider your financial goals and budget when making decisions about your student loan repayment. Consider joining our financial health programs to work directly with one of our financial health managers.
