Student loan debt is a big financial burden for many people.
In total, Americans owe $1.5 trillion in student loan debt.
Paying off student loans in a timely manner is all about having an actionable payment plan in place.
Here, a student loan expert shares a 10-step plan on how to pay off your student loans.
Student loan debt is a big financial burden for many people. In fact, Americans owe $1.5 trillion in student loan debt, according to data from the Federal Reserve.
While some may find themselves forced to defer or default on your student loans, it’s better if you’re able to come up with a system to pay them off — and within a modest time frame.
There are two primary reasons to pay down your student loan debt in a reasonable amount of time, Maizie Simpson, data and news editor at Credit Karma, told Business Insider via email.
“The first has to do with interest: The longer you draw out your repayment period, the more interest you’ll end up paying,” Simpson said. “The second reason is that the longer you have student loan debt, the longer you might put off big life decisions or making investments in your future, such as starting a family or contributing to a 401(k).”
When it comes to paying off your student loans, no matter how intimidating the debt amount is, making an actionable payment plan is key. Here, Elyssa Kirkham, a finance reporter and student loan expert for Student Loan Hero, took us through a 10-step plan for paying off your student loan debt.
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1. Know what you owe
Kirkham said that the first step in repaying your debt is to know your debt, especially since you might have taken out several student loans with various lenders. “Many people avoid thinking about or looking at their student debt too closely for a simple reason: Student loans are a huge source of stress,” she said.
She suggested using the National Student Loan Data System to find any federal student loans you took out while in college.
“You can also find both federal and private loans listed on your credit report, and check that you’re making the proper payments on time each month,” Kirkham said. “In addition, record the current balance and interest rate on each student loan.”
2. Triage your student loan debt
If you are in danger of or already missing student loan payments, Kirkham advised that you try to triage them.
“First, switch federal student loans to an income-driven repayment plan to lower monthly payments,” she said. “Then, apply for deferment or forbearance to pause payments if you hit a major financial setback, such as losing a job.”
Many private …read more
Source:: Business Insider