As summer is approaching, it’s a good time to take a look at your finances and check in with your student loans.
1. Do I understand my student loan options?
2. What is my student loan repayment plan?
3. What have I done to get this squared away?
If you don’t have the answers to these questions, it’s time to take action. Before you take action, you need to get informed which is why we’re here.
Here are our top 8 rules to getting your game plan in place:
1. Make a decision to deal with your student loan debt once and for all
In the United States there are more than 44 million borrowers amounting to $1.4 trillion in student loan debt alone. That means the average borrower from the Class of 2016 has over $30,000 in student loan debt and nearly 11% of all of all borrowers are currently in default.
If you don’t want to be just another statistic, you need to act now.
2. You have a couple options if you’re struggling to repay your loans
3. Understand what type of loans you have
There are two categories of loans, federal loans and private loans. Many students and borrowers don’t know which they have so here is a quick way to figure it out. Login to your lender’s website and take a look at your loan summary page. If your loans have a “fixed interest rate” then you have federal loans, if the interest rate has a ‘v’ next to it, it’s a “variable interest rate.” The variable interest rate indicates that you have a private student loan.
Private loan borrowers are not eligible for government assistance in the form of income-based repayment programs or student loan forgiveness. To find out about your options contact us at the number below.
4. Check the status of your loans
If you’re current on your loan payments, great. If you’ve fallen behind, are in default or are having your taxes or wages garnished, you’ll need to enroll in a rehab program.
5. Are you able to pay the monthly payment the lender is asking?
Lenders ask for roughly 1% of your total debt, each month. If you have loans totaling say $30,000 you will be asked to pay right around $300 a month. With $60,000 in loans you’ll be asked to make payments closer to $600 a month. This is often very difficult for borrowers to pay which is why the default rate is so high.
6. What is the best option for you?
If you can’t afford the monthly payment your lender is asking for, your best bet is getting enrolled in an income-based repayment program. If you’re eligible for one of the programs, your payments will drop to 10% of your monthly discretionary income. This means you could be saving hundreds every month on your loans and avoid default.
7. Find our if you’re eligible for student loan forgiveness
If you do qualify for one of the income-based repayment or student loan forgiveness programs, you should enroll immediately. To find out if you qualify and to enroll contact us today and a loan specialist will assist you.
8. Take action!
Now that you know your options, it’s time to do something about your debt. Getting on the right track with your debt is imperative to your financial future. If you go behind on your loans and can’t make payments, you risk hits to your credit and even tax return and wage garnishment. Avoid this at all costs and contact us today if you need assistance getting back on track.
Get on the right path to becoming debt-free, and get control of your finances once and for all.