Student loan payments typically become due six months after graduation. But that doesn’t mean you can’t start paying them off while you’re still in school.
Paying off your student loans early comes with significant financial benefits, too. Read on to find out how easy it is to make student loan payments while you’re still enrolled.
Build a budget for your student loan payments
Student budgets are notoriously frugal, but students with income have a leg up when it comes to finances. If you can set aside money each month to start paying your student loans, you will graduate in much better shape than most of your peers.
If you do not have a budget, there is no better time than the present to start. Check out budgeting apps to find out where your money is going. You might be able to save a few bucks each month to make room for loan payments. Some apps are free, like Mint, or subscription-based, like You Need a Budget.
Earn more to make student loan payments
What if your budget is too tight to make student loan payments even after trimming unneeded expenses? You may do well earning a little bit more on the side, either through a part-time job or side hustle.
Going to college is expensive and deserves your full attention. It is a job in itself. However, many students find they do better managing their time and money with a job while in school. Consider a paid internship or another part-time job that leaves you time for your studies.
Even if you can’t commit to a part-time job, you can work as a tutor, researcher, or find other jobs on campus that don’t eat at your free time.
Pick a student loan you want to pay down first
Take a hard look at your student loans to see which are accruing interest while you’re in school. Then, find the loan with the highest interest rate and focus on paying it down first. Even if all you can afford is $10 to $20 a month, it’s better than nothing.
For example, subsidized loans do not accrue interest while unsubsidized loans do.
Unsubsidized loans accrue interest each month according to their balance and interest rate. If you didn’t want my loan balances going up during school, you should set up automatic monthly payments to cover the interest, plus $5 for good measure.
If you are able to maintain a full-time job and live on a shoestring budget; this could help get the income you may need to put extra money towards your loans each payday. Perhaps focus all extra payments on the smaller of my two unsubsidized loans so the balance would fall during school.
Most students don’t have full-time jobs during school, so don’t feel bad if you can’t pay as much as others. Try to cover at least the interest accruing each month. You’ll thank yourself later.
Set up online payments for your loans
Automatic debits are a sure-fire way of making these payments on-time and without second thought.. Contact your student loan servicer’s website to get all that set up.
If you’ve never gone to your student loan servicer’s website, grab your most recent student loan statement to figure out who your loan servicer is.
A servicer is a company that manages your loans, the place you ultimately send your monthly payments to. Common student loan servicers include Great Lakes, Nelnet, and a handful of others.
Log into the servicer website so you can see your loan details. You’ll learn how much interest you’ve been accruing each month and how to set up automatic payments and make one-time payments.
If you have the cash cushion to make automatic payments, then do so. It will make student loan payments easier to manage. If your income is less reliable, you can make payments manually. Make a calendar reminder on your phone so you remember to make on-time payments each month.
Develop healthy habits in school
I once had a basketball coach in High School who told us, “How you practice is how you perform.”
If you start making regular student loan payments while you’re still enrolled, things will feel a lot easier after graduation. Think of this time as practice in managing debt.
Whether you are getting started with a few bucks per month or a few hundred, you are getting ahead on your loan payments and building healthy habits.
Post a Comment
Note: Only a member of this blog may post a comment.