How Not To Panic When That First Student Loan Bill Arrives
Posted on Sunday, August 31, 2008 at 3:42 pmThe magic day has come. After a lot of hard work and, honestly, a very good time, you have met all the requirements and are ready to graduate from college. It is a glorious time. Well, at least until that first monthly bill for your student loans shows up.
If you are like most new graduates you will be graduating with a degree in one hand and mind boggling debt in the other. Todays grads face up to $20,000 worth of student loans and that is nothing to laugh about. Those hefty bills can seem downright overwhelming at first, but there are a few ways to pay them off.
One of the first things that you can do is defer your loan payments. If you intend to attend grad school, have a hard time finding a first job, or are going through some serious economic troubles, you are entitled to deferment. For those that have found a job, things are just a bit different.
Ah, but what if you have a job waiting for you when you graduate? Deferal is no long an option. This creates a problem since most starting positions do not exactly pay a lot. To make ends meet, many use a trick to lower their month payments.
Make no mistake. The loan consolidation is a faustian proposition. You get relief in the form of lower monthly payments, but you will pay much more over the length of the loan. Why? The repayment term is extended to 30 years or more.
If you pay off the consolidation loan for the full 30 years, it is a vast financial mistake. To make it work for you, make one extra payment a year whenever you can. You will cut the repayment term down by half or more.
Going to colleged used to require a reasonable financial price. Now, it is very expensive. This means practically everyone is going to have to pay the piper with student loans. The key is to understand what you are getting into in relation to repayment.
The first thing to understand about repaying student loans is you will eventually pay them off if you stick with it. Pay anything extra you can afford whenever you can do so. Even fifty dollars a month can make a world of difference.
