7 Tips for Paying Off Your Student Loans

By Brittany Hawes on November 8, 2017

Image via Pixabay.com

Paying off your student loan can seem like an intimidating task, but it doesn’t have to be. If you’re starting to wonder how you’ll be able to start paying off your loans or even if you’re feeling too scared to apply for a student loan, these general tips for paying off student loans will help to ease your worries.

Tip #1. Know what you’re signing up for

Applying for a student loan is a big deal. It’s nothing to be afraid of, but once the loan is disbursed to your account and you use it, it becomes your responsibility to pay it back. If you go through the Financial Aid office at your college, you have the option of applying for a Direct Unsubsidized Federal Loan, and for students who show financial need, a Direct Subsidized Federal Loan.

A Direct Unsubsidized Loan starts accruing interest after it’s disbursed. If you don’t start paying the interest while you are in school, that interest will be tacked onto your initial loan amount. A Direct Subsidized Loan is only available to undergraduate students. This type of loan won’t start accruing interest until six months after your graduation from school. Up until that point, the United States Department of Education will pay the interest and you won’t have to worry about it.

There are other loan options available from places like banks and loan companies that you could also consider. Online options include SallieMae.com. Once you’ve done research into each kind of loan plus when and how you’ll be able to start paying it off, you can decide which you’re interested in applying for and which will work best for your personal financial situation.

Tip #2. Start saving early

It’s easy to say you’re going to start saving money as soon as you take out a loan but difficult to bite the bullet and actually start saving. There are a lot of things to buy while you’re in college. Saving might seem difficult at first but just know that you don’t have to put aside $200 every payday.

Every dollar that you can set aside, do so, even if it’s just a dollar. Budget your money so that you’ll have some money left over at the end of the month and put that towards paying off your loan. After a while, you’ll have accumulated enough money to start paying off your loan and you won’t have to scramble to get money once your grace period ends.

Tip #3. Plan ahead

It helps to have a plan. Don’t go into the world of student loans blindly! Starting right now, you should have a plan written down somewhere. Set up a handy payment schedule on your phone or on paper, starting with the day that you’ll start payments. Know how much you want to pay and plan to have that much money set aside for that day. It’s good to have goals to reach!

Tip #4. Open a savings account

Savings accounts earn interest when they are opened and have money kept in them. You could earn money towards paying off your loan by simply having a savings account opened at your bank.

Image via Pixabay.com

Tip #5. Don’t take out more than you need

This tip ties in with the “plan ahead” tip from earlier. You should sit down and figure out a budget before taking out a loan. If you plan on using the loan towards rent, calculate how much you’ll need for the semester. Any other expenses like food, textbooks, and gas should also be accounted for.

Add all expenses together and you’ll have a rough estimate of how big of a loan you’ll need to take out. Don’t overdo it with the loans because you’ll eventually have to pay that back plus some if that loan accrues interest.

Tip # 6. Lower your cost of living

Consider cutting back on some of your expenses. Aim for a cheaper apartment if possible this semester or add a few roommates to your current place to lower the cost of rent. If no one in your apartment watches a lot of TV, canceling your cable subscription is an option. Netflix and Hulu are much cheaper options, and as a student, you get Hulu free with your paid Spotify student subscription.

As much as I love trying new foods and restaurants, limiting my dining out to a day or two a week (less if necessary) and heading to the grocery store instead is something that’s saved me a lot of money. Think of all the things that you spend money on that can be reduced. Any unnecessary expense that you can live without for the time being should be considered when searching for ways to save money.

Tip #7. Start looking for a part-time job

In order to start saving money now, you are going to need a steady source of income. A part-time job could be your solution. Currently, I’m working a part-time position that pays around $12 an hour. Having a part-time job gives me enough time to do my school work and extracurricular activities. Some people are able to go to school full-time and work a full-time job. You know yourself best! Start applying for jobs that you know will best work for your schedule.

You can do it! If you follow these tips and stick to the plans you make, you will be able to pay off your student loans.

Hi there! My name's Britt and I'm a senior majoring in English major at Florida State University. I have these crazy, big dreams of traveling the entire world and writing novels in my spare time. I love music, food, and the Japanese culture. I plan on teaching English in Japan upon graduation from Florida State. My first YA novel, Twisted, was published by Deep Sea Publishing Company in 2014. It won a Readers' Favorite Book Award that same year. Alongside schoolwork, I'm working hard on the second book in the Twisted series as well as a number of other novels.

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