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10 Tips to Pay Back Student Loans Smarter

Student loans are an investment in your future, but repaying them can feel overwhelming when you finally graduate. Too often, recent grads don’t really understand their loans or repayment obligations and fall behind. You can make sure this doesn’t happen to you by carefully researching loans before committing, and following these ten tips to pay back student loans smarter.

  1. Don’t ignore the debts. It may be tempting to bury your head in the sand and simply ignore the debt you’ve accumulated during college, but this is a way to get yourself in big trouble fast. Take ownership of your loans by knowing everything possible about them. You may be surprised to discover that they are easier to handle than you expected when you face the reality head on.

  2. Research your options. Most loans, especially government education loans, give you many options on how you will repay them. Take advantage of this by really looking at each option and figuring out which plan works best for your life. You may qualify for loan forgiveness. You may be able to pay based on your income. This can be especially helpful when you’re just starting out.

  3. Use your grace period right. Most student loans have a grace period before you are required to start paying. If you have the money, though, start paying off your loans right away. You’ll be accumulating interest during this time, otherwise, which will only hurt you in the long run. If you are still looking for a job and can’t start paying back your loans, that’s ok. Just still use this time to do your research and set up the right payment plan for your needs.

  4. Stay in touch with your lenders. As soon as you move or change email addresses, inform your lender. You need to be in constant contact with them, so that you can ensure that you are informed of any changes to your lender or other factors right away. The best way to do this is to check your notices and balances online regularly.

  5. Pay down your debt as much as possible. It may be tempting to only pay the minimum payment on your loans, but this will only hurt you in the long run. The fastest—and cheapest—way to pay off your loans is to pay down as much as you can each month.

  6. Take advantage of hardship options when you need them, rather then defaulting. Everyone goes through hard times at some point in their lives. That’s ok. Your student loans are designed to let you weather these times through forbearance and deferral options. Missing payments or defaulting on a loan can have serious consequences for you in all aspects of your life, but using a hardship option when you really need it is a responsible way of dealing with your financial difficulties—and it will allow you to stay in the federal government’s good graces.

  7. Pay off your most expensive loans first. The higher the interest, the faster you should pay it off. Focus on paying off private loans and other high interest student loans first, and then worry about the others. It will take some of the financial pressure off you.

  8. Be willing to make sacrifices. It’s not always easy to pay off student loans, especially early in your career, but you have to be willing to make sacrifices to get through this time. Focus on paying off your loans in the short term, and save luxuries like the latest technologies and fancy vacations for later. Also, be careful about overusing credit cards while you still owe a lot on student loans.

  9. Switch to biweekly payments. It’s a simple change, but switching to biweekly payments can actually make the loan payments feel easier to manage—especially if you put just a little more towards the payment than the minimum each month. You’re also paying less in interest because there is less time between payments for interest to accumulate.

  10. Reward yourself. Set milestones, such as paying off a private loan or getting halfway out of debt, and celebrate achieving them. When you reward yourself for reaching your goals, you’ll be even more motivated to succeed. Just remember: paying off your loan is a reward in and of itself.

These tips will go a long way in helping you successfully pay off your student loans in the fastest time while accumulating the least interest and penalties.

If you are struggling to pay off your student loans, however, you aren’t alone. Millions of people in the U.S. struggle with debt every year. If you are in over your head and don’t know how you will handle your debts, you have options. Call the Ohio debt attorneys at Cleveland Bankruptcy Attorneys today at (216) 586-6600 for a free consultation on your case to find out how we may be able to help.

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