Taking college loans and owing debt has become the reality for the majority of the college students. According to Mark Kantrowitz (Vice President of strategy for college search and scholarship- Cappex.com), the graduate student debt on the average basis is about $37,172 in 2016 and it is 6.05 % higher as compared with last year percentage.
Dealing with college debt is difficult for students as there is continuous stress on them to pay the debt they owe.
Following ways can help you pay your college debt and get free yourself from continuous stress.
- Complete Understanding Of Your College Loan
Complete understanding about the exact amount, loan type, loan terms like interest rate, payment options like temporary deferment and other loan details like loan forgiveness, complete information about the lender, deferment and etc. is the must thing.
- Utilize Your Grace Period
Normally grace period is given after graduation to make payments against the loan. You need to utilize this grace period productively. You need to look into all the suitable repayment options.
Many facilities are available to make a repayment plan like online student loan calculator and you can check various repayment plans by calculating your budget and choose the most suitable one.
For instance, if your monthly payment for the loan is $280, take $1600 at the end of 6 months and save it as the emergency fund. It will be a great help as it will reduce your loan and you will save $280 for your loan payment.
- Develop A Monthly Budget
Mostly student overestimates their monthly payment against debt. As the average estimated monthly payment is $242 while students estimate their monthly payment up to $545 which is two times higher than the average estimation.
You need to develop a proper budget by taking help from e income-sensitive repayment options like Income-Based Repayment or Pay as You Earn to pay your college debt.
Moreover, you should choose affordable rent option like sharing your rent expense by having a roommate, limit extra activities that will cost you more like regular hangouts with friends, have dinner at expensive hotels, watching movies every weekend in threat, expensive bar tabs and etc.
Once you are done with developing your budget, you need to stick to it considering the reality of your debt situation.
- Consider Options For Loan Forgiveness/Loan Payment Reduction
Working with public service fields like AmeriCorps (working in public health or teaching), fire-fighters, public librarians, public university workers like professor and employee of any non-profit organization can help you in erasing part or all of your federal student loan.
Working with such public sectors you may get $5,645 toward your loans or your loan payment will be limited for ten years.
- Sign Up For Direct Debit
Consider smart options for your payment options. Your debt can be reduced by signing up for the direct-debit option by which your monthly loan payments will be routinely deducted from your bank account.
By choosing the option of direct debit your monthly payment will be given to lender on time and some lenders may reduce the rate of interest.
- Consolidate Your Loans
Consolidation is the best option to choose by making smaller payments to every loan instead of making the monthly payment to a higher amount of loan.
For instance, if you are deciding to pay some extra amount to certain loan than by adding increasing your interest rate to 4% preferably to a variable private loan as compared with fixed rate of the federal loan then it will be helpful.
Structuring repayment options to ensure students about accumulating their loan debt and the options for dealing with that debt is important. Moreover, above mentioned ways can also help students in dealing with their college debt.
Jasmine Demeeter is the finance expert at UK Dissertation Help Deal. She is also an experienced freelance consultant and works for different companies. Her other interests are sports, photography and film shooting. Follow him Google+.