Posts Tagged ‘student loan payments’

Halfway Through Your Grace Period: How to Prepare for Student Loan Payments

While you can still vividly remember your name being called and the president of your college shaking your hand as if it had just happened yesterday, the fact is, that day was nearly three months ago now! You have been a college graduate for almost 90 days. You are 90 days richer in real life experiences. You are also 90 days closer to having your first student loan bill come in the mail. That six month grace period doesn’t seem like such a long time anymore! Whether you have been planning for your student loan payments since graduation, or thinking about them now has thrown you into a complete and utter panic, check out these ways you can prepare yourself for the day you have to begin paying off those four years of wisdom.

Find Out What You Owe

If you haven’t already looked into how much money you owe, and how much your monthly payments will be, now is the time to do it. Yes, it’s scary. Yes, it’s easier to just pretend your debt doesn’t exist for as long as you possibly can, but believe it or not, taking control of the situation will feel better! You can find out what you owe in federal loans by logging onto My Fed Loan. Take a deep breath, and click on the link.

Create a Budget

Now that you know what you owe, and you lived to tell about it, it’s time to take a look at your budget. All this means is getting an idea on what you’re making and what you’re spending. You can start by making a list of all of your bills as well as how much you spend on things like rent, gas, and food. Use online banking, or your past receipts for some guidance. Once you have completed your list, add up the total amount you spend each month. Subtract it from your income. This will give you an idea on whether or not your student loan payments can currently fit into your budget.

Adjust Your Budget

If you can comfortably fit your student loans into your budget, then nice job! You can congratulate yourself on being a super financial planner. However, many will find that their student loan payment isn’t affordable given their current financial situation. In this case, you will first want to see where you can adjust your budget. What can you cut back on? What can save you money?

Adjust Your Payment Plan

Sometimes, no amount of budget adjustments could allow you to afford your student loan payments as they are. In this case, you will want to explore one of the numerous alternate payment plans at your disposal. You can research and switch your payment plans at My Fed Loan.

Last Resort

If your grace period is up, and you have yet to find a job that allows you to pay even the minimum amount possible on your loans, you have the option to defer for six months.

 

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How to Pick Your Student Loan Payment Plan

Did you know that you have a say in how you pay off your student loans? Unlike your rent and other bills, federal student loans offer quite a bit of flexibility with a variety of payment plans you can choose from. While some plans are reserved for those who can prove they’re in financial hardship, others can be implemented by anyone, regardless of their situation. If writing those checks every month on the Standard Plan feels like a punch to the gut, check out some other popular options that may make repayment a whole lot easier!

My Situation: I have an insane amount of student loans and paying them back means writing a check for close to a thousand dollars each month. At this rate, I won’t be moving out of my parents’ house until I’m in my thirties!

My Plan: Extended Repayment

How it Works: If you have over $30,000 in student loans, you can pay them back over twenty-five years instead of ten years under the Standard Plan.

Pro: Your monthly payments won’t be so scary.

Con: By extending the amount of time in which you pay back your loans, you’ll accumulate more interest. In other words, you’ll be paying more overall, but less on a monthly basis.

 

My Situation: I just began an entry level job. My monthly payments are a bit more than what I can afford right now. Maybe after I get that promotion, they won’t be so bad…

My Plan: Graduated Repayment

How it Works: If you don’t have enough money to afford your monthly payments in full right now, but suspect as time goes on you will, this plan starts your payments off lower than on the Standard Plan, with the payment amount increasing every two years.

Pro: You’re paying smaller amounts while you’re still the youngster at work, and larger payments as you move on up in the world.

Con: The last years of your payments will be higher than on the Standard Plan.

 

My Situation: I always have enough money for my monthly payments, but I’m a little forgetful, and some days I would rather pay the late fee than drive to the post office and buy stamps.

My Plan: Automatic Payments

How it Works: Your student loan payments will be taken out of your bank account automatically at the time they are due.

Pro: You have the comfort of knowing your loans are always being paid.

Con: You still have to be aware of what’s in your bank account so you don’t overdraw.

 

My Situation: My monthly payment is always due the same week every other bill I have is due, and then I end up eating Ramen for two weeks until I get paid again.

My Plan: Altered Due Date

How it Works: You can change the date your student loan payment is due so it’s more convenient for you!

Pro: You’re not starving while you wait for your next paycheck.

Con: Well, there really isn’t one!

 

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