If you’ve just recently graduated from college, congratulations! Best of luck finding a job and starting your career.
Right now is the best time to start thinking about paying off your student debt as quickly as possible to avoid huge interest charges and the inevitable stress of having a college loan bill arrive in your mailbox every month. Below are a number of excellent tips to help you do just that. Enjoy.
First, keep in mind that this debt will never disappear and, unlike other debts that you might face in your lifetime, you can’t get rid of these through any means besides paying them off.
If you haven’t already done so, sit down and read through your loan repayment guidelines. This will show you exactly when, for example, payments are due, how much your minimum payments will be and much more vital information.
Remember that, in order to pay down your student loan debt quickly, you may have to make some sacrifices now. By doing whatever you can to pay off as much of that debt as quickly as possible you’ll be saving yourself a huge amount of interest costs in the future. In other words, it’s well worth it to hang on to your older car, keep that old television and try to get as much use out of all of your electronic gadgets as possible.
Consider also making more than the minimum payment every month. If you can afford to do it, your best bet is to pay as much as possible now to pay down that student loan rather than getting a new home, putting that money into savings or, heaven forbid, spending it on things you don’t really need. There’s no way that, for example, the interest you would make in a savings or checking account, or even on other types of investments, will equal the amount of interest that you will have to pay over the next 20 years on your college debts.
If you haven’t already figured it out, starting to pay off your student loans immediately is an excellent idea. Many student loans give you a six-month grace period but you certainly don’t have to wait and, by starting to make payments as soon as possible, you’ll get into the excellent habit of doing it.
Lastly, do your very best to live below your means for the next few years. Trying to keep spending on things like recreation, entertainment and vacations down to a minimum. Yes, it might not sound like a lot of fun, but once that student loan debt is paid off a huge amount of stress will be taken off of your shoulders completely for the rest of your life. Two or three years of living frugally, in the opinion of most financial experts, is well worth the financial rewards that you will reap from not having to pay 20 years (or more) worth of interest rates.
Debt of any kind should be paid off as quickly as possible but, in the case of student loans, the interest rates are usually quite high and the penalties for not paying on time are high as well. Paying down this type of debt as quickly as possible is one of the most financially savvy moves that you can make in your adult life and, if you do, you’ll be well ahead of your peers in many ways.