For many, student loan payments loom over their head like a wave ready to break. While a massive wave is the surfer’s dream, it’s an ominous reality for many borrowers. Whether you’re graduating soon and your student loan payments are just beginning or if they’re beginning after you delayed payment due to the Executive Orders which have suspended payments and interest on Federal (NOT Private) loans, now is the time to take control.
Here’s some steps to take control:
- Document all your loans with details, private and federal, interest rates, payment plan details (length, interest rate, % of income, if income based, etc.) Your loan servicer likely has a web portal where you can find all the details, so print out your records. They should also be able to provide you with online and over the phone customer service. Sadly, based on news reports, you should still double-check what you’ve been told by your servicer.
- Build a habit of monthly budgeting: Look ahead to the coming month and write down your Income: money coming in and your Expenses: money going out. Include your student loan payments in the out-going money. It’s OK to use an estimate, but your servicer should be able to provide you with a pretty accurate amount of your coming payment. Before you take on any new debt (car, house) and increase spending (nicer apartment, furniture, etc.), ensure you have “room” in your budget to make your full student loan payment–it’s a priority.
- Make on-time payments–every time. Some servicers give % discounts for setting up on-line autopayments, which helps reduce your payment AND helps you pay on-time. A win-win. If your not comfortable with autopayments, calendar your due dates in your phone, on paper, whatever is necessary to make your payments on-time.
- Remember-bad news does not get better with time. If your concerned about being able to make your payments, then it’s time to look at increasing income or decreasing other expenses to make room. Review your budget to see if you can reprioritize to meet you student loan obligations. Read More at: Bad Moon Rising. What to do in times of financial crisis. If you are still having trouble with payments or experiencing a loss in income contact your servicer, as soon as possible, to see what options you may have available. Just remember deferring payments or extending the payback period may provide you with relief, but it will almost always increase the total cost of the debt you’ll pay over time.
If you’re not ready to tackle your debt on your own, request a free consultation call with one of Better’s fee-only, accredited financial counselors. Contact – Better Financial Counseling Network
We’ll walk with you and help you set up a plan to live life AND pay-off those student loans.
Photo by Matthew Hume on Unsplash