When you want to pursue a lucrative career, a college education is perhaps the only way you can achieve it. Unfortunately, college education in America is quite expensive and students pass out of college carrying a huge amount of debt on their shoulders. According to https://www.forbes.com, the average student debt for the class of 2017 passing out of public and private non-profit colleges was $29,000 while for private for-profits, it as a high as $40,000. While these statistics are certainly dismaying and a source of constant worry and stress for students trying to make a life for themselves after passing out of college, fortunately with a clear-cut plan and with the help of digital tools and apps, getting out of debt is now somewhat easier. These digital facilitators along with a well-chalked out plan can help greatly to lift the burden of student debt quickly. Let us find out how:
Know Your Debt Inside Out
When you have taken on multiple debts, including student loans, it can get very confusing trying to figure out the total amount outstanding and the time it will take for you to pay them off. Using one of the many debt planning and calculator apps can be of great help to make sense from the chaos. Simply download the Debt Payoff Planner & Tracker on your iPhone or iPad and input the details of your loans, including the balance, minimum monthly payment, and the APR to enable the app to create a personalized debt payoff plan for you. Even though it is not designed to be specifically a student loan calculator, this very useful app will easily be able to tell you the number of years that it will take to become debt-free. The app is very intuitive to use and the great visuals make it very appealing too.
Decide on the Best Rate of Refinancing
While Federal student loans are unarguably the cheapest in the market, any shortfall in your overall requirements may have forced you to take on student loans from private lenders that are usually very expensive. These costly private loans can very easily be refinanced with lower-cost loans to save you a lot for the loan. You can use tools like LendEDU or Student Loan Hero to find lenders who will give you the best refinancing rates. Comparing interest rates, repayment options, as well as eligibility criteria from all the reputed student loan refinancers, can be done with just a click of the mouse.
Review and Protect Your Credit Score
Your credit score is unarguably the single biggest factor that decides how much money lenders will give to you and the rates of interest they will charge. It is important to safeguard your credit score even before you think of taking a loan so you need to be careful in repaying your credit card dues on time because missing out on the payments or maxing out your credit limits will adversely impact your credit score and make taking on debt on reasonable terms difficult for you. Even after you have taken on the student loans, you need to be careful about making the payments on time because if you slip up, you will end up damaging your credit score that can make refinancing or even access to credit in the future more difficult and expensive. Make it a point to obtain your credit report from all the three leading credit rating agencies every year for a thorough review to establish that all the facts contained therein are correct and your credit score is not being negatively impacted due to wrong reporting, advises a NationaldebtRelief.com counselor. As per law, you can get these reports free of charge every year just by applying online. Credit Karma is a very handy website because apart from allowing you to check your credit score, it makes available a host of user-friendly tools and calculators all free of charge, for tracking your score and optimizing it. If you have debt that you are unable to manage, you can also make use of its personalized recommendations for debt management.
Make a Detailed Budget to Track Your Money
It is really important to stay on top of your expenses and manage your money effectively when you need to pay off student loans. Without a budget, it can be impossible to allocate your money properly and find out how you are spending your money. An app like You Need a Budget or YNAB as it is popularly called, can help you to create a personalized budget that lets you allocate specific amounts to every expense head and then tracks your expenses to inform you whether you can stick to your budget or not. Another app, Mvelopes allows you to allocate different amounts of money to specific expense heads that you create and then link your bank account to it for paying off bills as and when they become due. You can see the money you have in each of the digital envelopes so that you can adjust your spending accordingly and stay within your budget.
Investigate Options Provided by Employers
An increasing number of companies are recognizing that the ability of employees to contribute to their retirement funds is hampered by their obligation to pay off student loans. Consequently, they are offering assistance in the form of low-cost student loans that help to reduce the debt burden of their employees and allow them to prepare better to meet their long-term financial goals. Ask your employer if it has any such scheme for employees or lookout for companies offering this benefit when hunting for jobs.
Since student loans are a very large component of your total obligations, it is easy to become obsessed with it and ignore the impact of other loans that you need to often take for affording a certain lifestyle. It is important to take into account living expenses as well as credit card debt, car loans or even the impact of a mortgage when managing your debt. Websites like Mint and Learnvest can provide comprehensive assistance for managing your money and assisting you to pay off your debt at the fastest.