5 Tips For Repaying Your Student Loans Like A Boss

student loans

As someone who graduated college with about $30,000 in student loans I was shocked, scared and confused as to how I was going to manage pretty sizable monthly loan payments with the meager salary of a (Junior) Art Director when I first graduated, but I was determined not to get browbeaten into depressed submission at the thought of having loans follow me for the next 10 years.

It was an investment in my education that I can’t take back even if I wanted to, and the contracts have been signed, the money loaned and spent, and the figurative damage has been done. I’ve since tried to look at it as an opportunity to build my credit score, learn discipline, and gain financial responsibility. Below are five tips that have helped me tackle my student loans, and get on track to paying them off in a shorter amount of time without living like a complete pauper.

1. Know your loans. I can fully confess here that upon graduation from college, student loans seemed like the forgotten, bitter, drunk aunt who shows up at family party like a dark cloud and inhales the shrimp cocktail platter while she asks if you’re married yet and if you can drive her out to go grab some cigarettes. Like the unpleasant and mysterious woman she is, whom you know you have to interact with eventually lest she truly shit all over the party and ruin you, I knew I would have to face those loan payments and I knew it would be painful. At first I didn’t even know the name of the lender of my loans, I was (vaguely) aware of the total amount of money I had taken out and was completely oblivious to how much the interest payments would increase the overall amount I would be paying over the lifetime of the loan. If you are worthier than I, you’ll graduate knowing at least those 3 basic things as this is your first foray into true adulthood with adult responsibilities that have the potential to affect your line of credit for the next 10 years. Do your homework and know your facts and timelines. It’s time to prove to your parents and the larger financial community that you are an upstanding and respectable young adult who deserves a good credit score and a chance to lay some solid financial groundwork for your future.

2. Lower your principal whenever you can. Although this seems obvious, the longer you keep a balance on your loan the larger amount of interest you’ll pay over the lifetime of the loan. In order to keep that grand out of pocket total as low as it can be, it’s a smart idea to try and throw extra money at those monthly payments wherever and whenever you possibly can. When you pay the lowest monthly amount on the loan, you’re setting yourself up to pay off your loan over the course of the maximum amount of time they will let you, while paying THE MOST amount of money in interest. Each month your payments first go toward any late fees that need to be covered, next to the interest, and FINALLY toward the actual balance or “principal’ of the loan. It took me 2 years to fully appreciate that a majority of what I had been paying up until that point was mostly interest and I had only chiseled off about 2,500 of the ACTUAL loan. *ugly cries* You should be treating your loan as you would a mortgage, as in very seriously and diligently. Whenever possible, try to pay double or even triple the payment for the month. There have even been times that I have even paid twice in one month after an especially good babysitting gig, where I looked at that $100 and knew it would be frittered away on frozen yogurt and shopping, and that I might as well put it to good use instead.

3. If possible, begin paying loans off right after graduation, rather than waiting out the X month grace period. A lot of of new college grads (nearly everyone I knew) figure out that they have a certain grace period before they start having to pay off loans (mine was 6 months). Upon hearing that it’s something they can temporarily put off, they breathe of sigh of relief and wait to the end of that grace period before they even start considering starting to make payments. Instead of letting 6 months go by while your loan racks up interest, consider starting making payments right away. For example, take advantage of all the $$$ you get thrown at you at your college graduation party and put it to good use! I pooled together all my resources after my graduation party and made a $1,000 payment toward my student loans with the highest amount of interest to get a jumpstart on repaying that sucker back. #humblebrag

4. Consider consolidating your loans. If you meet the requirements that allow you entry into the elite class of “loan consolidators” (jk, it’s not that difficult to do this) it can truly make your loan repayment process more streamlined and manageable. Although this idea may seem scary or confusing it doesn’t have to be. In a nutshell, consolidating your loans allows you to simply make ONE monthly payment that have all of your students loans rolled into one and the benefit is that you’ll have one (usually lowered) interest payment. They usually take the different interest rates of the loans, combine them and come up with an average to use as the new interest rate. Do your research and ask around as to what bank or program best suits your needs. This article and this article gives helpful suggestions for some of the top 5 banks/programs through which you can refinance and consolidate your loans.

5. Consider taking part in programs that will forgive some of your loans. First of all, there are some extreme circumstances that will allow for your student loans to be forgiven and it’s your job to look into the various circumstances to see if any of them are applicable to you. Although this is something I don’t have personal experience with, there are work programs like AmeriCorps or Peace Corps Volunteers, that will forgive a significant chunk of your student loans, depending on the lender and the rules/restriction of the loan. If you are desperate and willing to do something where you travel abroad and teach for a year or two, there are some great ways to get creative with repaying student loans.

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