If you are going to be starting college at the end of this summer, or even if you’ll be graduating this summer, then money might be at the forefront of your mind. If you’re going to be starting out, then thinking about how much you can afford for various things, as well as living costs and the course fees. If you’ll be graduating soon, then looking at reducing how much debt you have is always going to be a good thing. So if you’re a little unsure of where to start, Miss Millennia Magazine is here to help. Follow the following tips, and you can leave college with less debt than the majority of your classmates.
1. Calculate Specific Costs
You’re going to reduce the amount of debt that you have if you simply borrow less money. So don’t just get a large student loan just because you can. Be specific with the amount that you want to borrow. It is a good idea to sit down and calculate what you need the money for. Will you be working to cover your living costs, or will a loan need to cover it all? Will your family be helping in some aspects? If so, how much can they contribute? There are many lenders out there, but you need to choose the one that is going to be right for you. Check the interest rates too. Again, you owe less money if you have borrowed less, and that includes the interest rates too.
2. Pay Off As Soon As You Can
Don’t just wait until you’ve graduated to start thinking about paying off your student debt. If you are working alongside studying, then make it part of your budget to pay off some of your student debt each month. When you start paying off the loan as soon as you can, it will reduce how much interest you pay. It will also make the debt more manageable when you’re staying on top of it all. So look at your budget and work out what you can pay back early.
3. Set Up a Direct Debit
Setting up a direct debit, or auto-pay, with your savings or checking account, is a great way to make sure that payments are met. This might be something that you set up when in college, or it might be left for when you are working full time. Either way, it is a good thing to do. It makes it easier to pay off your loan when you don’t even have to think about it; the money is automatically deducted. You do need to have the money in your account, though. So being aware of your budget and spending is key.
4. Pay Off More Each Month
All loans have a set minimum that needs to be paid off each month. But don’t just go for the minimum if you can avoid it. Paying off more than the minimum each month helps to reduce your interest payments, as well as helps to clear your debt earlier. So if you can, it is a no-brainer.
If you follow these four steps, then you can reduce your student debt before you even have to think about paying it off!