If you are like most recent college graduates, you like have at
least twenty or twenty-five thousand dollars to pay back in loans that
you had to take out in order to finance your college education. Whether
you want to erase your debt as quickly as possible or slowly without
paying too much interest, it is possible to do both of those things. The
key is knowing how to do them.
People who try to repay their debt without doing any research usually end up blindly throwing money at the companies they borrowed to for years without even thinking that they could be erasing their debt in other ways that would save them potentially thousands of dollars. This article will give you the tips you need to develop a plan and execute it and be once and for all free from student debt.
The best part about your student loans is the low interest rate. You may have found an interest rate that is even fixed at under five percent when you were borrowing money for college. These kinds of loans typically have the lowest interest rate of all forms of borrowing money and this should be used to your advantage. Let's say you are trying to erase your debt fast and paying more money than you have to every month. Instead, you should be putting your extra money into a savings account.
For this example, we will estimate that your savings account has an interest rate of five and a half percent and your student loans have an interest rate of four and a half percent. Instead of paying back the money that you borrowed ahead of schedule, you should put it into your savings account. You will be earning more on interest than you are losing by not paying back the money you owe.
Eventually you will accumulate enough money to make a large payment and even if you do not erase your debt, the debt will become small enough that the interest on it does not have much of an effect on the amount of money that you have to pay back.
Your tax return and any other large amounts of money that you receive all at once should be used to immediately pay off some of your debt of to go into your savings account if you are using that method. One of the biggest mistakes that college graduates make when they get their first real job is go out and buy things. They do the same thing when they get their tax returns which can be thousands of dollars.
Buying things should be put off for a few years until you are debt free. When you are finally debt free, that is the time to celebrate and go out and buy things now that you do not have to worry about repaying loans from many years earlier. Be smart with your money and make sure to stick to whatever plan you develop to pay off your student loans.
People who try to repay their debt without doing any research usually end up blindly throwing money at the companies they borrowed to for years without even thinking that they could be erasing their debt in other ways that would save them potentially thousands of dollars. This article will give you the tips you need to develop a plan and execute it and be once and for all free from student debt.
The best part about your student loans is the low interest rate. You may have found an interest rate that is even fixed at under five percent when you were borrowing money for college. These kinds of loans typically have the lowest interest rate of all forms of borrowing money and this should be used to your advantage. Let's say you are trying to erase your debt fast and paying more money than you have to every month. Instead, you should be putting your extra money into a savings account.
For this example, we will estimate that your savings account has an interest rate of five and a half percent and your student loans have an interest rate of four and a half percent. Instead of paying back the money that you borrowed ahead of schedule, you should put it into your savings account. You will be earning more on interest than you are losing by not paying back the money you owe.
Eventually you will accumulate enough money to make a large payment and even if you do not erase your debt, the debt will become small enough that the interest on it does not have much of an effect on the amount of money that you have to pay back.
Your tax return and any other large amounts of money that you receive all at once should be used to immediately pay off some of your debt of to go into your savings account if you are using that method. One of the biggest mistakes that college graduates make when they get their first real job is go out and buy things. They do the same thing when they get their tax returns which can be thousands of dollars.
Buying things should be put off for a few years until you are debt free. When you are finally debt free, that is the time to celebrate and go out and buy things now that you do not have to worry about repaying loans from many years earlier. Be smart with your money and make sure to stick to whatever plan you develop to pay off your student loans.
Since you're actively seeking student loans then you should definitely look into these options for the best student loans available to you.
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