While nobody argues that taking out a student loan to pay for your college education is a bad thing, not being prepared for the realities of the loan after you have graduated is definitely a bad thing. Here are some mistakes you might very well be making and how to correct them so that you save big money every month.
Failing to Make A Plan
Everybody knows that they need to pay their loans back after college, but too many are lulled into complacency by the grace period. It is actually best to start paying the loans back as early as possible, including while still in school, if possible. While you may not be required to pay the loan back during the grace period, you are nonetheless still letting interest accrue. By coming up with a realistic plan to handle the several hundred dollars a month payment that will be due and paying on them as early as possible, you will be saving not only money but headaches as well.
Not Staying in Touch
While it is the responsibility of the lender to send you a monthly bill, it is not their responsibility to make sure you give them updated contact information. This is something you must be vigilant about. To make things easier on yourself, check to see if the lender offers an option to have all bills emailed to you. This way you will always get your bill, even if you move often or are not diligent about keeping your address updated with your creditors.
Failure to Explore All Repayment Options
After paying on your student loan for a bit of time, why not see if you are eligible for a refinance loan? If your credit rating circumstance change, contact your current lender while also shopping around to see if you can get a better interest rate and lower monthly payment to ease the financial burden that has loomed since graduation.
Not Changing the Due Date
If you find yourself bombarded with bills at a certain time of the month, and your student loan payment is part of the barrage, ask to have the due date changed to a later time in the month so that your bills do not seem so overwhelming. You are much more likely to make payments on time and feel less stressed if the payments are spread out throughout the month.
Not Paying Aggressively
If you are not aggressively paying off your student loan, or any loan for that matter, then you are simply aggressively putting yourself in further debt. The more money you pay on your student loan, the less money you will be paying in the future on interest payments. Needlessly paying interest costs you a lot of money that could be put to better use in your investment accounts.
Overusing Forbearance
Any time you can avoid paying interest is a time you save money. Since interest accrues monthly, the more you can reduce it, the more monthly expenses you save money paying. Forbearance is great relief if you face an emergency situation like losing your job, but it should be used for just that, an emergency.
