2 answers
Dena
Student
Mechanicsville, Virginia
2
Questions
Asked
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What is the best way to manage paying off student loans?
I am asking about paying of loans because I have student loans and I also have loans for my daughter. And I am not sure how we will pay for all this debt. #student-debt #student-loans
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2 answers
Andre Goulbourne
Analyst
3
Answers
Fort Worth, Texas
Updated
Andre’s Answer
Hi Dena,
The best way to pay off student loans is really to tackle the issue from several angles.
One of the first things to do is to create a budget. When you create a budget you can see where you have the opportunity to cut spending on non-essential items.
The second thing to do is to ensure that you have a plan to boost your income. If your career is going to take time to develop there is nothing wrong with working a second job to ensure that you can pay the loan off as fast as possible. When you make the minimum payments you can get into a cycle and feel as if this is here to stay. You have to feel it a little to remind yourself that the banks are make a lot of money when you make payments for a long time.
Now make sure when you look at these loans you educate yourself of what types of loans they are. There are different federal programs that can lead to loan forgiveness so really educate yourself because half the battle is having information.
I wish you the best of luck.
The best way to pay off student loans is really to tackle the issue from several angles.
One of the first things to do is to create a budget. When you create a budget you can see where you have the opportunity to cut spending on non-essential items.
The second thing to do is to ensure that you have a plan to boost your income. If your career is going to take time to develop there is nothing wrong with working a second job to ensure that you can pay the loan off as fast as possible. When you make the minimum payments you can get into a cycle and feel as if this is here to stay. You have to feel it a little to remind yourself that the banks are make a lot of money when you make payments for a long time.
Now make sure when you look at these loans you educate yourself of what types of loans they are. There are different federal programs that can lead to loan forgiveness so really educate yourself because half the battle is having information.
I wish you the best of luck.
Simona Hunt
Project Manager
41
Answers
Washington, Washington
Updated
Simona’s Answer
Hello Dena,
When you juggle multiple priorities, it is hard to see what is the most important. My recommendation is to have a good mix. It is always best to pay your bills first. If you have any extra after then you should immediately start paying down on your loans. FI you are able to pay extra on just one of the loans, called snowballing debt, you can pay it off sooner (each one at a time). It can be as little as $10-$200/month. I am attaching some links to articles on this.
https://www.daveramsey.com/blog/get-out-of-debt-with-the-debt-snowball-plan/
https://www.nerdwallet.com/blog/finance/what-is-a-debt-snowball/
https://www.investopedia.com/terms/s/snowball.asp
Since you did not state where you are in the school process, I am making assumptions that you and your daughter are still in school. The advice below will impact that. In my experience, the best thing you can do is make a plan! Depending on the types of loans you have, it will differ what your payments look like. For example, if you have government undergraduate loans, some types allow for deferred payments and interest while you're in school. So, if your loans are set up that way you wouldn't have payments during grad school. That doesn't mean you should avoid paying them during that time period, but it would help your overall total to not have interest running up while you're in grad school. Something that you may find really helpful is to set up a budget so you understand your financial commitment and can ensure you are setting aside the money required to pay your monthly statement. Any money that you can pay extra toward your loans will save you money in the long run because you will pay less in interest. Any loans you start paying off while you're still in school will lessen your loan burden and decrease your monthly payments when the payments come due!
If you start to pay on the loans while in school, and before they are officially due, you are paying on the principal (which is the actual loan balance). Once you graduate, the loans become active and due, so whatever you pay may primarily go to interest until you make a good dent in them. If you can swing paying on them while in school, I recommend it. The school may have some financial aid options available for you. Visit the financial aid office right away and look into them. Some options will include: partial scholarships, financial aid (pell grants), work study programs, etc. If you can do these then this will cover some of the debts and you can take out less in school loans. Also look into private scholarships to reduce your loan burden from websites such as www.fastweb.com and www.scholarships.com. If you are able to work part-time while in school then this can be an additional option to paying for school and keeping your loans down too.
When you juggle multiple priorities, it is hard to see what is the most important. My recommendation is to have a good mix. It is always best to pay your bills first. If you have any extra after then you should immediately start paying down on your loans. FI you are able to pay extra on just one of the loans, called snowballing debt, you can pay it off sooner (each one at a time). It can be as little as $10-$200/month. I am attaching some links to articles on this.
https://www.daveramsey.com/blog/get-out-of-debt-with-the-debt-snowball-plan/
https://www.nerdwallet.com/blog/finance/what-is-a-debt-snowball/
https://www.investopedia.com/terms/s/snowball.asp
Since you did not state where you are in the school process, I am making assumptions that you and your daughter are still in school. The advice below will impact that. In my experience, the best thing you can do is make a plan! Depending on the types of loans you have, it will differ what your payments look like. For example, if you have government undergraduate loans, some types allow for deferred payments and interest while you're in school. So, if your loans are set up that way you wouldn't have payments during grad school. That doesn't mean you should avoid paying them during that time period, but it would help your overall total to not have interest running up while you're in grad school. Something that you may find really helpful is to set up a budget so you understand your financial commitment and can ensure you are setting aside the money required to pay your monthly statement. Any money that you can pay extra toward your loans will save you money in the long run because you will pay less in interest. Any loans you start paying off while you're still in school will lessen your loan burden and decrease your monthly payments when the payments come due!
If you start to pay on the loans while in school, and before they are officially due, you are paying on the principal (which is the actual loan balance). Once you graduate, the loans become active and due, so whatever you pay may primarily go to interest until you make a good dent in them. If you can swing paying on them while in school, I recommend it. The school may have some financial aid options available for you. Visit the financial aid office right away and look into them. Some options will include: partial scholarships, financial aid (pell grants), work study programs, etc. If you can do these then this will cover some of the debts and you can take out less in school loans. Also look into private scholarships to reduce your loan burden from websites such as www.fastweb.com and www.scholarships.com. If you are able to work part-time while in school then this can be an additional option to paying for school and keeping your loans down too.