If you’re a college student, you know how hard it is to get by with limited funds. Between books and tuition fees, living expenses, and other necessities, it can be difficult to find money for anything else—especially student loans. However, if you’re not careful with your finances as a student and graduate without paying off those debts, then things can get even worse later on. Here are some tips for repaying your student loans while still in school:
Student Loan Payments While In School
Know the grace period of your loan.
One of the first things you need to know is that your grace period will begin when you graduate. The length of this period varies depending on what type of loan you’re getting and can be anywhere from 6 months to 12 months, so it’s important that you understand how long your specific grace period lasts.
Consider getting a part-time job.
If you’re going to school and need help paying for expenses, it’s a good idea to get a part-time job. While having a full-time job is excellent for your resume and making new friends, it may not be feasible for your work schedule or financial situation. Working in addition to school can help you make ends meet and give you the flexibility that comes with working fewer hours per week.
If you do decide to work while in school, know that finding a job will not be easy and there might be many hurdles along the way. You will likely have difficulty getting time off from your class schedule or balancing assignments with working hours if they are scheduled at odd times (for example: evening shifts). However, if done correctly and successfully managed, holding multiple jobs simultaneously could lead us toward success!
Don’t use credit cards.
The most important thing to remember when it comes to paying for school is that credit cards are not a good option. While it may be tempting to use a credit card to pay for things like books, food and transportation if you don’t have the money in your account at the time, this can lead to serious financial problems down the road. The interest rates on credit cards are usually much higher than those on student loans and other types of debt, so using them as a way to get out of debt quickly is not a good idea.
If you do decide to borrow money from a bank or other financial institution in order to pay for school, make sure that the terms are clearly understood by both parties before signing any papers. This will help prevent any misunderstandings later on down the road regarding payment amounts or due dates that could come back and haunt you later (such as being sued).
Be smart with student loans.
You’ve got to be smart with your money.
If you’re going to borrow money to pay for college, don’t take out more than you need. The amount of loans that students are borrowing has increased dramatically over the past decade and this is due in part to the fact that students are taking on debt at an earlier age. In 2014, 86% of undergraduates graduated with student loan debt compared with only 65% back in 2004 according to Student Loan Hero. And it’s no wonder why: According to a report by the Institute for College Access & Success (TICAS), approximately 40 million Americans now have outstanding student debt totaling roughly $1 trillion dollars—and unlike other types of loans (like mortgages and car loans), there are few options for getting rid of this debt early or even refinancing it at lower interest rates once it has been consolidated into one loan through an income-driven repayment plan like PAYE or REPAYE which can help reduce monthly payments substantially depending on how much money you earn each month. Many borrowers may end up paying off their loans with incomes so low they cannot afford basic necessities such as food; others may choose not make payments at all due to low wages while still others might default on their obligations altogether leaving them without any recourse except bankruptcy proceedings if they cannot get caught up on payments after defaulting first time around.”
Base your budget on monthly income and expenses. Take into account everything from cell phone bills to car insurance to groceries.
You can use a budgeting tool like Mint or YNAB to create your budget, but it’s also helpful to view it as a checklist of things you have to pay each month.
You’ll want to include:
- Your income from all sources (doctors, lawyers, etc.).
- The amount you spend on groceries every month and how many times you eat out per week.
- The amount of money that goes toward rent and utilities (water, electricity).
- How much goes toward transportation costs like gas for your car/public transportation fares.
Create a budget that suits you. It might be easier for you to budget by week or by year instead of by month.
- Budgeting is hard.
- You might find it easier to budget by week or by year instead of by month.
- This way, you can have more accurate information on the money coming in and the money going out.
- It’s also more flexible, so if your spending habits change but still stay within your budget you will be able to adjust accordingly.[ENDWRITE]
Find a way to keep track of your spending. Whether it’s a digital app or an old-school spreadsheet, tracking what you spend can help you see where your money goes, so you can make changes if needed. For example, if you notice that you spend $100 every month eating out, consider cutting back on some of those meals to save money for debt payments. (You can also use these tips for paying off credit card debt.)
As you begin paying your student loans, it’s important to keep track of your spending so that you can make changes if needed. If you find that you spend $100 every month eating out, for example, consider cutting back on some of those meals so that those dollars can go toward paying down debt instead.
You may also want to use a spreadsheet or app like Mint or Personal Capital (the latter is free) to track your expenditures. Having this information at hand can help in other ways: For example, if a big bill is coming up and there’s not much money left in the budget for it and nothing has been allotted from other sources (like a tax return or refund), then knowing how much money went into each category will help determine what needs cutting back on so there’s enough left over for the big bill.
Prioritize making payments on time, and if possible pay more than the minimum payment each time (even if it is just $10). Late payments may incur additional fees and can increase the overall cost of your loan, which means more interest paid in the long run. Making even small extra payments each month will help reduce principal—and interest will accrue on that reduced principal amount, which means less interest paid in the long run.
- Prioritize making payments on time, and if possible pay more than the minimum payment each time (even if it is just $10). Late payments may incur additional fees and can increase the overall cost of your loan, which means more interest paid in the long run. Making even small extra payments each month will help reduce principal—and interest will accrue on that reduced principal amount, which means less interest paid in the long run.
- Avoid late payments at all costs. Late payments can have serious consequences for your credit score and will add additional costs to your overall student loan debt.
- Avoid additional fees as much as possible by paying off loans before they are due or by consolidating multiple loans into one single loan with a lower interest rate. This reduces monthly payments and saves you money over time!
Repaying your student loans while still in school is hard but there are ways to do it more easily
While it’s true that repaying your student loans while still in school is difficult, there are ways to make it easier. Here are some tips for paying off your student loans while you’re still in school:
- Try to make payments on time. Late payments will cost more interest over time and can negatively impact your credit score.
- Make extra payments when possible. While every dollar counts when you have a lot of debt, consider making an extra payment or two whenever possible as they can really help lower the amount owed overall—and that’s what matters most!
- Reduce the interest rate on your student loan(s). If possible, try calling the lender and asking if they’ll lower your rate (which is something they may or may not be willing to do). It never hurts to ask! If a reduction isn’t possible, look into refinancing at another financial institution so that you can potentially get a lower rate than what was originally offered by default; however, keep in mind this could result in additional fees paid out due to closing costs associated with such actions so do be sure before moving forward since those costs could add up quickly over time depending upon how much money has already been borrowed from said lender(s), etcetera…
Closing
Repaying your student loans while still in school is hard but there are ways to do it more easily. The first step is getting a good handle on what you can afford each month, and then creating a budget based on that amount. Next, make sure you have the necessary funds available before making any purchases or paying off debts so that you don’t get stuck with late fees. Finally, prioritize making payments on time (even if it’s just $10), because late payments may incur additional fees and can increase the overall cost of your loan—which means more interest paid in the long run.