Congratulations on the huge accomplishment and successfully dedicating yourself to building your future. Unfortunately, the amazing feat of completing extra schooling and obtaining a formal education also comes with the downside of having to pay for it all.
If you’re anything like most people, you more than likely had to apply for a student loan to pay for schooling and the general cost of living during the time you were enrolled. If you’re in this boat, know that you’re not alone. Sure, finding yourself in student loan debt isn’t necessarily a place you want to be, regardless of the institution, but it is the very real situation that comes with furthering one’s education. So, how do you go about paying off your student loan debt without racking up any more expenses and doing it the quickest way possible? Well, stay tuned! That’s what this article is about!
Obtaining a lower interest rate would be a fantastic place to start. When exploring your options and looking into lower interest options regarding your student loans, there are many variables you’re going to want to be aware of. If you have federal loans, you’re going to want to reconsider if you plan to jump onto the refinancing bandwagon. When you refinance a federal student loan, it’s going to be held by a private lender. When you refinance with a private lender, you surrender the ability to take advantage of any type of federal assistance such as income-driven repayment or loan forgiveness programs. I probably don’t have to tell you this, but If you simply can’t pay back your loans, know that they will not just disappear. And you should be aware of how severe the consequences can be.
If you decide to refinance your student loans, regardless if they are federal or private, be sure to check the interest rate as well as the terms of repayment. This is something that a lot of people overlook and end up paying for later. When you’re trying to figure out which refinance company or program you want to choose, consider the following:
Do You Qualify For The Best Interest Rate?
Some institutions will advertise their best interest rate but that doesn’t necessarily mean that’s the one you’re going to qualify for. In most cases, optimal rates will have rather specific payback and qualification terms that you may not potentially qualify for. It’s a good idea to go over the rate ranges that the company offers as well as what your target number would be before you start jumping through hoops to be qualified. It’s worth being cautious if you want to avoid paying any extra or hidden fees, as well as having your credit checked with a hard pull.
Make Sure The Math Checks Out
Math is one of those things that isn’t a matter of opinion. There is a clear right and wrong answer no matter what the mathematical equation is. With that said, sometimes mistakes happen, which is why it’s never a bad idea to double-check the numbers. Calculators and comparisons will be two of your greatest assets when looking for an advantage when it comes to refinancing. If you find yourself taking on new terms, ensure that they benefit you in the long term. Even if your payment decreases over time, it doesn’t automatically mean that you are actually saving money. If the payment is spread out over a longer amount of time with a higher rate, your payments, in the end, could be higher than you anticipated.
Keep Your Credit In Good Standings
No matter what you do in life, you’re going to want to keep your credit in good standing. The better your credit is, the more appealing you look as a borrower, which means you’ll be eligible for better rates. If you find yourself in the top credit tier and you’re currently earning enough to cover your new loan, chances are that you will qualify for some of the best repayment terms available on the market. Continue to always make payments on time, keep your debt to available credit ratio as low as possible, and glace at your credit profile from time to time to check for fraud or other incorrect information that may lead to future problems. I cannot stress this enough, keep that credit rating high!
Do Your Homework
Since you just finished your schooling, you know a thing or two about homework and how detrimental it can be to making educated decisions in the future. Lenders are not all created equal and they will have different terms and rates to offer compared to others. Refinancing your student loans can be a great way to decrease your interest rate and refocus on paying off your debt promptly. This can be something that haunts you for years to come or something that you control from day one. And all it takes to prevent yourself from being on the losing side of student loans is to do your homework.