I have student loan debt. Yes, I do and it’s not the best or worst situation.
When my six month grace period began to wind down, I panicked. I didn’t know how I was going to afford my payments with my first big girl job just being 30-35 hours and a pay that definitely showed how low I was on the chart at that company. Not only did I have these payments coming up but I had just got a new car because I was in a car accident and my previous car was ‘economically unfixable’. With rent, utilities and a car payment, it’s understandable why I was in a frenzy.
I researched and researched for options because I needed an answer.
Luckily for me, I have decided to not let the situation leave me bitter or in despair. Right before I had to pay my student loans, I got my full-time big girl job and I was able to afford what was being proposed but that’s the ending and we’re missing the rest of the story.
This is my own little journey of paying off my student loan debt. I want to do it sooner rather than later and that takes time – my current job pays well but I have other responsibilities. I wish I could have a ‘how I paid off $100,000 in 18 months’ story but I don’t nor do I have that much debt. That’s not the point. The point is that I’m going to do it but at my own pace. The point is that not everyone else’s story is my own story.
No one else’s story is your story – their story might be encouraging and push you to want to do better on your payments and that’s okay.
Student loans will not destroy you unless you get in over your head and let them. I’m here to tell you to do the research and find out what option works best for you. I have private and federal loans – neither are breaking my bank but they make me wish I had that extra money to spend, not going to lie. Each loan is handled differently because the rules are different.
My private loans are consolidated with a timeline through the bank. It’s a bigger chunk of my budget to pay them because, with private loans, you can either defer, pay what they’re proposing, consolidate/refinance for a better rate (it’s usually a few hundred dollars less than what the proposed payment is), or enter forbearance.
My ultimate goal is to detail my student loan payoff and share the tips I have gained along the way. You never know when something you possess can help someone else out.
It’s scary. Once you finish college, you’re excited to be recognized as an adult and do all the things you dreamed of doing with your career and you get that faithful reminder that your loans are due. Panic sets in because you don’t know what to do — most people aren’t prepared for this part and that’s why you shouldn’t panic. Deep breaths and research. Research anything and everything that you can that will relate to your situation. This is part of adulting. You have options, remember that.
Income Based Repayment
From what I read online, people try to deter others from this option. This option isn’t a bad option. In fact, it’s a really good option if you want to make small payments and avoid forbearance or deferment — I use this option with my subsidized/unsubsidized loans. There are other options like Pay As You Earn and whatnot but I don’t have experience with those options so I can’t speak on those options. Income Based Repayment has helped me out a lot because it is based on my salary. I don’t have to make $500-$1000 payments because that would be outrageous. It’s crazy that some lenders expect you to pay so much and not consider the other things that you have to pay for. IBR lets you either send in a pay stub or your tax return and they will find a reasonable amount to have you pay.
Consolidation is super helpful when you have multiple loans with different payment dates and you just want everything to be on one day with one payment. Make sense? Basically, you’re refinancing your loans. The process is simple but it does take about three weeks to really get things together so start thinking early if you’re considering this. One pro is having the one payment, once a month rather than multiple payments throughout the month. If you’re going through a bank, you’ll receive an interest rate and the payment they want you to pay — unlike IBR it’s not something that will be based on your income. My bank has a timetable of when everything will be paid off and breaks down interest that I pay, the usual. I would definitely go with this option if different loan companies with different interest rates have been involved.
This is easy and it’s really up to you. You can pay extra every now and then when you have the money to spare. There’s a possibility that at the end of the month, you reached your savings goal so you have extra money to move around and want to pay some more off your loan — do it. I always throw in extra when I pay because I feel like I’m taking off a larger amount in some ways. It doesn’t have to be something you do all the time but it’ll make a difference in the end.
Many people base their timeline on what the lender is sharing with them — they break it down in 10, 15, 20, and 25 increments and draw out the process. It’s a lot when you look it over, a little bit overwhelming because there goes your money but you can create your own timeline. Referencing back to the previous point, paying extra and above what your minimum is can change your timeline. The spare money can affect your timeline. If you don’t like what the lender is giving you, start making your own calculations and play around with different numbers to see what you need to do to be debt free.
It will seem scary at first and you might get overwhelmed but you have to remember there are options. There are representatives that will talk to you and help you out. Google is your friend and Twitter, I find that Twitter is a helpful resource when it comes to getting answers. Student loans suck – paying for a higher education to do what you want to do in life, sucks a lot. Scholarships are helpful but they won’t always cover everything and that’s where loans come into play. I want to share my own ride with paying back these things and I want to encourage others or hear other people’s stories.
Don’t let your debt destroy you because you can get rid of it — it is something that goes away. Trust me, if I were to continue whining about it and not finding answers, I wouldn’t be writing this.