It’s a troubling situation many students and their parents can relate to, mountains of student debt. For some, the debt has risen to 6 figures and may feel impossible to pay down, but the financial professionals at Broussard Poché, LLP are here to help.
Here are 4 ways you can get that student debt under control:
Use The Grace Period Wisely
If you just graduated, you’ll probably have a bit of a grace period before you start paying loans. Take this time to research your loans and all your options. Also, take the money you will have to pay back and start putting an equivalent payment into a savings account month after month, this will help build an emergency fund for after the loan payments become mandatory.
Consolidating could help lower your interest rate; it’s certainly worth exploring. Consolidation could also help by making it easier to keep track of payments and what you owe. After consolidation, multiple loans get combined into one payment. This makes it less likely that you’ll face late fees and credit issues down the road. However, you should never consolidate your federal loans with your private loans, keep those separate. And your credit score will come into play, you may lose some loan benefits and possibly loan forgiveness. Consolidation is something to consider, but be sure you understand the specifics.
This is an easy step that can help lower interest over time. Many lenders offer a reduction in your interest rate if you sign up for auto-payment. Plus, you’ll be less likely to face late fees or miss a payment. Just one missed payment can drive up your interest rate.
Some states, including Louisiana, offer a few programs for specific professions. Also, some military careers also offer loan forgiveness. It may seem extreme, but if a few years of service or relocation can shave off decades of student loan debt, it might be worth it for many people just starting their working lives.
Be sure to keep track of your progress and later in life when you are making a little more money, explore other student loan payment options.