Typical New Year's resolutions involve vowing to take better care of your health or to achieve something great this year. College students or those who recently graduated should also make it their goal to reduce or get out of student loan debt this year.
According to USA Today College, it is important to create resolutions that are more specific and attainable. Mark Struthers, a Minnesota-based certified financial planner, said that clients who have an aggressive yet doable plan have the most success in being able to achieve their goals.
The publication shared tips on how to best tackle student loan debt. These are specific ways that can help you with managing your debt.
Know your payoff date
Calculating when you will be finished paying your student loan debt is a good way to motivate yourself. It may even help you complete your payment faster. You know that you have the usual 10-year repayment plan but knowing that you will be debt-free by Mar. 2027 can help you stay in line with your goal.
There are online tools that can help you figure out when you'll be free from student loan debt. Check out CalcXML or Student Loan Hero. Afterwards, create a loan paydown plan and let your servicer know about it.
Get a new debt management strategy
It is advised that debts should be prioritized by interest rate. Credit cards and personal loans typically carry higher rates than student loans. This means that they cost more in the long run.
Your financial plan should be able to manage all your debts. Don't just focus on your student loan debt. It was previously reported that one common way to pay debts is through the "debt avalanche," where students start off "aggressively repaying" the debt with the highest interest and, after it has been cleared, moving on to the debt with the next highest interest rate.
Lower payments to make loans fit your budget
Thinking about the amount that you have to pay may seem overwhelming. Applying for income-driven repayment plans can help you get on the right foot with your student loan debt.
Another way is to go for student loan refinancing. With this, you can exchange your existing loan for another one with different conditions such as a lower interest rate and payment amount.
