What You Need to Know About Student Loan Repayment
Whether it's looking to secure employment, traveling, moving, or going back to school, post-graduate life can be filled with many options. But many new college graduates entering the "real world" face the same daunting task: student loan repayment. Whether you are about to begin repaying your student loans or are well on your way, we can all use some motivation to keep us on the loan repayment track. Read below for tips on managing your student loan repayment successfully.
Who is your student loan servicer?
It is important to know the servicer of your student loans, regardless of if your loans are federal, private, or both. The servicer is the entity that will collect your loan repayment. For your federal loans, you will get assigned a servicer. If you have a private loan, your lender will select its own servicer and provide you with that servicer's information. If you have a MEFA Loan, your loan servicer is American Education Services (AES). You can learn more about sending your payment to AES here. The more you are informed about your loan servicer, the more prepared you'll be during loan repayment.
How are you paying?
If you're concerned you will miss a student loan payment, consider using ACH, also known as Direct Debit. With Direct Debit, you will set up an automatic electronic deduction from your checking or savings account to occur on your due date each month. Since your loan payment will happen automatically, you can be confident that you loan payment will be applied on time each month. Also, Direct Debit is a completely free service and may even qualify you for an interest rate reduction.
B is for budget
It is challenging to know how your student loan payment(s) will impact your budget if you haven't nailed out a budget to begin with. While your budget doesn't have to be elaborate, it primarily should work for you, not against you. If you dread the B word, start by taking a few minutes to simply analyze your income and expenses. Something that is helpful for me is reviewing my account summary statements from my bank. I really get a holistic and full picture not just of what I am spending, but what my money has gone toward the most. Pro Tip: Pinterest has a page full of free budget planners!
Save, save, and save some more
Paying off a debt and saving for something at the same might seem impossible. But it's only impossible until it's done! Before you tackle debt, consider the variety ways that you can make additional money. Whether it's picking up a side hustle or selling previously used items, making passive income can help towards your saving goals.
Consider future goals
If you plan on going back to school, consider how this will impact your existing student loans. Federal loans offer the benefit of in-school deferment whereas that isn't the case for all private loans or lenders. If your lender does not offer in-school deferment while you go back to school, that means that you will be required to continue making payments on your loans.
It's important to consider that everyone has a different student loan repayment journey. We'd love to hear yours! Share your story and tips with us on Facebook, Twitter, or LinkedIn.