Paying Off Student Loans: Prepare Yourself

Preparing for student loansYou may be nearing the end of your college career, but that doesn’t mean you’re off the hook. If you’ve taken out education loans like most students do, you can look forward to years of paying for college. Preparing now can make the financial road ahead a little less bumpy.

1. Get a Job 

You won’t be able to meet your monthly payments if you have no source of income. And, while you may be busy finishing your degree, it’s a good idea to start your job search before you’re out of school. Ideally, you will line up a job to start as soon as you graduate, with little or no downtime in between.

2. Save Up Money

Once you have a steady source of income, you should start building up your savings fund. Most student loans have a grace period of six months, so that you have half a year after graduation to begin making an income before you start paying off student loans. Use this time to get your finances in shape. Start building up an emergency fund, which should be able to cover expenses for three to six months. It’ll be much tougher to set money aside once you have the monthly student loan obligation.

3. Get on a Budget

While not essential, a well-planned budget can help you avoid serious financial pitfalls. The number one budgeting tip for college students is simple: spend less than you earn. Figure out how much you spend regularly by tracking receipts and purchases. Then determine exactly how much money you earn each month. If you’re spending more than you earn, find places you can cut costs by re-examining discretionary purchases like magazine subscriptions and impulse purchases.

4. Ask for Help

If you know you won’t be able to meet payment deadlines, ask for help at the first sign of trouble with your college debt. You may be able to modify the repayment schedule in order to reduce monthly payments or defer student loan payments until you recover from a temporary economic hardship.

Planning ahead can significantly reduce your stress level when it comes time to repay your student loans. Whether you’re still in college or are already making payments, you have options to adjust your finances and improve your monetary standing.

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