Helpful Tips on Repaying your Loans

Before it's time to repay your student loans, it's essential that you understand the options available to you. Savvy Student wants to inform you that a little planning and knowledge now, can go a long way toward making your student loan repayment easier and less stressful.

Step 1: Know Your Lender

This may seem very basic, but many students have loans from different sources. For a detailed view of your financial aid history check out NetPartner on Sage or stop by our office, if you are unsure of your loans. Once that is complete figure out ways in which you can repay your loans. Can you make payments online or set up automatic bill pay? What repayment plans are available?

Step 2: Consider Consolidation

According to Student Aid on the Web, a Direct Consolidation Loan allows a borrower to consolidate (combine) multiple federal student loans into one loan. The result is a single monthly payment instead of multiple monthly payments. However, you want to keep in mind that by consolidating you're extending your repayment term, which may lower your monthly obligation, but could mean paying more interest over time. However, since student loans have no prepayment penalty, you could always make additional payments when you are able to do so.

Step 3: Repayment Options

Most loans will require minimum monthly payments, but sometimes you may be able to afford to pay more each month. If you find yourself with a little extra cash, you should try to make a larger than usual payment to at least one of your loans. Pick the loan with the highest interest rate and largest principle, this way you might prevent yourself from building up a little more of that evil interest. Keep in mind that loan companies will usually consider larger-than-usual monthly payments as just that, and not as an advance payment for the next month. Therefore, you will still probably owe the minimum monthly payment for the next month, and you should plan for that. If you get extra cash this month, but will likely have a deficit next month, save today's cash for next month's payment.

It may be helpful to use a budget spreadsheet. This way, you would be able to plan for all of your expenses and income, and be able to save in advance for any foreseeable loss of income or foreseeable increases in expenditures. A few excellent budget spreadsheets are available here, including spreadsheet specifically for debt-reduction. Don't forget to include your monthly payments towards your loans!

For any and all loan repayment advice you may always stop by our office to speak with Steven Doona, the Assistant Director of Student Loans.

Best of luck to you!!!!!!!!!!!!!!!!!!!!!!

Savvy Student