Smart habits that can help you pay off your student loans faster

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By: Amy
on 16th Aug,2013

While there are some who find it easy to repay their student loans, other college graduates struggle to make their payments on time.
Smart habits that can help you pay off your student loans faster


Many students who graduate come out of college with two things: their diplomas and their student loan bills. While there are some who find it easy to repay their student loans, other college graduates struggle to make their payments on time.


Graduating from college is a very exciting time, but the transition isn’t always easy—especially financially. Once you graduate, you need to find a job and start paying off your student loans on time if you want to maintain a healthy credit rating and history. While you may be more focused on starting your career, you should keep in mind the following important financial tips to help you pay off your college loans and develop smart financial habits.

• Create a budget and stick to it- It is best that you practice budgeting before you graduate, but it is never too late to start. Learning how to set a realistic budget is a very important financial tip for college students, college graduates, and anyone who simply wants to practice and develop smart financial habits. To create a budget, list all of your expenses and determine the amount of money that you earn versus the amount of money that you need to spend or are unnecessarily spending each month. This way, you will be able to create an outline detailing your necessities and your wants, which can help you come up with ways to live within or below your means. Keep in mind that one of the reasons you are practicing this habit is so you can repay your student loans more quickly; therefore, try to cut back on your wants as much as possible, especially if there is no actual need for them. By doing so, you can set aside the money you save and use it to repay your student loans.

• Payoff debts in advance- If you have a credit card balance or other bills you need to pay, make it a habit to pay them off in advance or at least on time. Make a list of all the bills you need to pay and set a reminder on your phone or your calendar so that you will never forget to make a payment. This habit will serve to be extremely helpful when you have to start paying your student loans back. Once you graduate, you may be given a grace period of three to six months before you are required to start making the payments; however, if you have some money saved or are already earning an income, start paying down the debt as soon as possible. In addition, if you can afford to pay more than the monthly minimum payments, do this as it will help you clear your debts much faster. Take note, however, that some lenders charge a fee if you pay in advance or finish your loan earlier than the agreed-upon time. If this is true of your lender, then it might be better to wait until you are required to start paying. Just do not forget to put reminders on your phone or your calendar so you do not miss any payments.

• Save money- Try to be as frugal as possible, especially in college, and set aside the money you have left after graduating. It doesn’t matter if your savings are small or aren’t consistent every month. What is important is that you learn the habit of saving. By being diligent about saving, you will be able to develop this smart financial habit, which will help you save some money to pay off your student loan as well as save for future necessities such as investments and retirement.

• Regularly check your credit reports- You need to learn how to check your credit score and your credit reports and understand why it is important to monitor them regularly. One of the reasons that checking your credit reports is important is that they contain information that can help you stay up-to-date when it comes to some aspects of your finances, which can help you with your budget. If you are closely monitoring your finances, you will be more likely to make informed decisions regarding there payment of your student loans and other financial debts that you accrue in the future.


Do not let student loans get in the way of your career and your goals after you graduate from college. Although they can affect you financially, if you practice the smart financial habits listed above, you will be able to come up with a good financial plan that will help you pay them off more quickly and more easily.


 

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