You made it through college. Congratulations. Oh, and now it is time to begin paying back that monumental student loan for many years to come.
While graduating from college is an exciting time, the reality of the cost of that education can bring one crashing back to earth quickly. But, you are not without options. Here are some different paths that you can take relative to your loan re-payment process.
Stafford loans can take from 10 to 25 years to repay depending on which payment plan you chose. Your options were:
A standard payment plan with equal payments over 10 years.
A graduated plan with steadily increasing payments over 10 years.
An extended plan with fixed or graduated payments over 25 years available only if you borrowed more than $30,000.00.
And income-contingent plan with payments based on how much money you make.
The Perkins loan provides a standard 10 year repayment program only.
Stuck with It. Those who have to stretch their payments over a longer period of time do so while placing a burden on themselves. Their budget will be hampered by that monthly payment. It will be more difficult to purchase a house or other major expense. In fact, it is like a mortgage, except when the final payment is paid, you do not have a nice visible asset to show for it. This is not to say that this route is wrong, but rather that it should be shunned if at all possible to pay off the balance of the loan sooner.
A disciplined person who pays off the loan as soon as possible is in a better position financially to move ahead.
Pay More Every Month. You will begin to see the balance drop dramatically if you are able to place higher monthly payments on your education loan. Work at a second job to earn more just for this purpose. Throw as much money as you can at this loan until it is gone. Deny yourself some of the ‘finer’ things in life until you get it paid off.
Then, once it is paid off, celebrate. Throw a party bigger than your graduation! Paying off a loan of this size shows discipline and determination. You are to be commended. As a matter of fact, you can visualize yourself with this loan payment and use those good feelings as a motivator.
Whatever path you chose, do not fail to recognize the incredible power of being master of your own money and not a slave to lenders. It will help you direct your efforts in paying off your student loan which will help you be a better employee, too!