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What's the best way to approach student loans?

As we are all gonna graduate with a pile of loans, what's the best way to approach them? Is it best to consolidate all loans or pay them one company at a time? #loans #college #debt #financial-planning #college-advice

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Rachel’s Answer

All of the above are excellent suggestions. I would reinforce the need to limit all extraneous spending until student loans are paid off. With interest rates as high as 6.8%, you should be paying off loans as quickly as possible.
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Hillary’s Answer

It is possible to graduate without a pile of loans. It may be a good idea to get a part time job and utilize the funds to pay for classes up front instead of taking out loans. If you have already taken out loans, do not wait to pay them down. Throw as much at them as possible right away, live below your means and create a budget. Dave Ramsey has excellent ideas to graduate college without the burden of student loans. This will free you to hopefully begin building wealth as soon as you start your first job out of college.
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Simeon’s Answer

It's possible to get your loans consolidated. See if you can open an account at a credit union and get your loans refinanced there. You can often get a better rate. You'll sometimes have a debt company break up your loans into different amount at different rates. Focus on paying off the higher interest loans first if you don't end up refinancing.
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Jacob’s Answer

Hi, Stephanie,


If consolidation or refinancing is not a feasible option for you then I would recommend focusing on high interest rate loans first. Paying down the principle on those will enable you to avoid high interest payments, even if the balance is lower than your other loans. For example, if you have two loans, one with a balance of $11,000 and an interest rate of 3.2% and another with a balance of $4,000 and an interest rate of 5.6%, it would make sense to pay off the $4,000/5.6% loan first since it will accrue interest faster than the $11,000/3.2% loan.


Kristin made a good point about checking for early payment penalties - understanding the terms of your loans is critical to prevent extra fees.


I hope this helps - good luck!
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Kristin’s Answer

Hey Stephanie, I actually got a personal loan with a lower interest rate with a steady monthly payment that had an options to pay more if I ever wanted to, you would want to check if there would be any penalty to pay off your loans early of course. You would just use a personal loan and pay all of the loans off and only have the monthly payment. I would possibly check this link out www.lendingtree.com . Check with the company your student loans are through and see if there is a penalty, I would add up all of it and model a loan with this website figure out how much your monthly payment would be verses what you are paying right now.
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Richard’s Answer

Do your best to refinance at a lower rate. This might mean consolidating all loans into one, or just refinancing the individual loans. Pay off the higher rates first. Don't fall into the trap of missing payments or taking on new debt like credit card debt.
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