How to Repay Your Student Loans
Americans owe more than a trillion dollars in student loan debt. That’s the equivalent of two US defense budgets or the entire GDP of Spain. Wow! So, what’s the average debt per student? The answer, $29,400 and it may not seem like that much but wait until all of that interest starts adding up.
So how are you suppose pay that off when the average salary for a college grad is not much higher than $45,000. Here are some pointers on how to get control of your student loan debt:
- Live at home: Living at home may seem like a drag but it’s going to save you more money then you know. With no rent, electric bill, and food bill, you will be saving a ton of money each month. If you don’t have to pay any of these you will be able to save money and pay these off faster.
- Speed up repayment: the key is to pay off your student loans as fast as possible. The longer you wait to pay these loans the more interest that racks up. But make note, you want to make sure you tell the loan company that you want any extra payment you make to go to the principle not just the interest.
Types of plans:
- Standard plan: This is the default plan and means paying the same amount on your loan every month for ten years.
- Graduated plan: Payments start low and go up incrementally every two years. This is a great plan if you expect your income to increase incrementally.