Manage Your Student Loan Debt Better in 2015

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It is usually seen that most of the students fail to manage their student loan debts efficiently after their graduation. The reason is quite simple. Most of the students spend their earnings on comfort and luxuries instead of repaying their student loan debt. It has become comparatively easy to acquire student loans. However, each one of us should keep in mind the fact that repaying loans are not easy as borrowing it. This is why there arises the need of a proper strategy when it comes to managing your loans. It is desirable to formulate these strategies while you are still in college instead of waiting until you get a good job. If you are one of this kind, here are some easy tips for you to manage your student loan debt better:

1) Go for financial counselling

It is better to go for a financial counselling session before signing the loan agreement papers to the lender. The more knowledge you have about the borrowing and repayment, the better you will be prepared for paying it back.

2) Set up automatic payments

You will never end up missing a payment if you set up automatic payments. Some of the lenders also offer discounts on the interest rate if you do so.

3) Calculate your debt

Once you complete your college education and when it is time to start repaying your debts, calculate how much money you have to pay every month. Keep aside the loan amount without fail even if you have to cut out certain luxuries in order to do this.

4) Look for other options

If you find the minimum loan amount to be repaid is not affordable, you can also look for another repayment plan such as a consolidation plan.

5) Set bi-weekly payments 

Pay your loan debt every other weak instead of adding it to the month end. This helps to cut your loan debts faster.

6) Student loan consolidation 

Student loan debt consolidation will be effective only if you owe several lenders. Debt consolidation ensures that you repay loans at cheaper rates and this option is effective if you have student federal loans. Making your payment automated will help you because you don’t have to remember the dates of repayment. You should only consider this option if your debt amount exceeds $10,000 or if the interest rate is higher than the current rate in the market. You should never combine government loan and private loans at any cost, otherwise you will not be able to claim any federal benefits like subsidized rates or deferment.

7) Consider refinancing

In case of student loans, you will always want to get the lowest interest rates possible. This will reduce your total loan payment and also the monthly payment. The best ways to save money in terms of student loans are to refinance your loans at a low interest rate. Refinancing is an option when you have an increased income or a better credit. The lower the new interest rate, the more you can save on interest.

The repayment term for your loan depends on the amount you have taken as a loan from the lender. If you are not financially responsible, it can even take more than 30 years to close the loan. So it is important to be responsible for the amount you have borrowed and to clear off the debt amount at the shortest time possible. If you clear your debt sooner, your interest rate will definitely go low. Finding out a lender who gives you favorable interest rates and better terms and conditions is not really easy. So before choosing a lender, do your own research by searching online and asking your friends and neighbors.


Author Bio: The author is an established freelance writer who is currently working for several websites that deals with finance, insurance, car dealership and travel. She has been working in the industry for the last 5 years. She is also a writer at essaypro.com.

How To Pay Off Credit Card Debt

Debt is a horrible master. Nothing saps wealth like being in debt. Just take your monthly payments, add them together, then times it by twelve.

How much do you spend on debt?

Once you get the number go to this compound interest calculator. Set as the interest rate a reasonable rate (try 6%). Then set the years to the average length of a car loan (5 years), then take your monthly amount you spend on debt and add it to the calculator. Select the compound interval to yearly. What is the number you get? Image what you could buy or save if you paid off debt!

How do you pay off debt? Follow these simple steps:

1. Get the current balances for your debt accounts.
2. Throw the amounts and list in excel or Google spreadsheets.
3. Sort the list from smallest to greatest.
4. Add due dates, minimum monthly payments
5. Pay off the smallest amount ASAP
6. Take the minimum payment you were paying for the smallest balance and add it to the next smallest balance. Ex: Visa minimum is $50 per month, Master Card is $100. After VISA is paid off, apply th $50 to the Master Card monthly payment making it $150
7. Keep doing this until you reach your mortgage.
8. At this point I would apply half of what you were spending on consumer debt to pay off your mortgage faster!
9. Celebrate!!

Top Ten Tips for Getting Yourself Out of Debt

Unchecked debt can snowball, and before you know it, it can feel like there’s no way out. Here are a few tips to get you started on regaining control of your finances:

1. Get motivated.

Setting yourself an end goal and reminding yourself of it every day can help and give you that extra push. Promise yourself a reward each time you reach a milestone, such as paying off credit card debt or sticking below your budget. If you feel negative all the time it can feel like a losing battle and you’ll fail before you even start.



2. Work out how much you actually owe.

It’s a common mistake to think that you only owe what you borrowed. That $1,000 on your credit card can soon double if left to accumulate interest. Make sure that interest rates for each creditor are accounted for: it will probably shock you into taking action.

3. Understand your debts.

As well as thinking about the interest rates and factoring these in to your budget, you need to understand all of the terms and conditions on any contracts and credit agreements that you have. All of your creditors may have different rates and rules so this can sometimes be quite complicated. A loan to consolidate debt can reduce your monthly payments and give you fewer creditors to worry about.

4. Know your options.

The best option for you can take some research but there are many ways to get out of debt, including consolidation loans, a moratorium, a debt agreement or bankruptcy.

5. Negotiate with your creditors.
If you don’t ask, you don’t get - so try asking for a lower interest rate or negotiating lower, more manageable repayments. Often, some smaller level of repayment is better than no repayment at all, and many creditors favour this option. If they say no, re-evaluate - there’s nothing lost.

6. Prioritise your debts.

Pay off the most important debts with the highest levels of interest or for the greatest amounts before focusing on smaller loans and lower rates.

7. Set a realistic budget.

Log every penny you spend and it will help you realise where you are spending unnecessary cash. However, make sure that you budget for emergencies and don’t leave yourself short each month or it will drive you back to the money lenders.

8. Use cash instead of credit cards.

Go to the ATM once a week, only take the cash you have budgeted for and leave your bank cards at home. Physically seeing the cash fly out of your wallet will make you realise how much you’re spending and what you’re spending it on. It will also give you a good idea of where you can make cuts. Credit cards aren’t money - if you don’t have the cash in your wallet, you can’t afford it.

9. Take action against those unnecessary expenditures.

Your log of expenses and those disappearing dollars will soon make you rethink that fancy restaurant reservation. A little expense here and there will soon add up – know when to say no.

10. Don’t be too hard on yourself.

If you give yourself an unrealistic budget and change your lifestyle completely, the chances of you succeeding are pretty slim. Make sure you have room for a treat every now and then to keep you motivated: depriving yourself of everything you love is a recipe for disaster - especially when combined with the existing stress of debt.