A student loan is an investment in your future. Discover some ways you can plan your budget to proactively manage your loan payments.
Only borrow what you need
Generally, you’ll start repaying student loans six months after you graduate or leave school – this means it’s important to borrow responsibly from the start. If you aim to keep your loan payment to no more than 10-15% of your anticipated post-college income, you should be able to maintain a realistic repayment timeline. To get a better sense of what your payments will be, try using Wells Fargo’s College Cost Calculator and loan repayment calculators. Also, consider paying off other debts during your grace period so that you can focus on student loans when they’re due.
Pay on time and often
It’s important to avoid falling behind on your repayment schedule since you can potentially facing a late fee on top of your payments. You’ve got options for being proactive and making sure you stay in the clear. Creating a budget can help you make on-time payments. First, record your monthly income and subtract your expenses, including your loan payments. Then, see where you can cut costs, and possibly make extra payments. This will help repay your loan and reduce the amount of interest owed. Even one extra payment a year can significantly reduce your total loan costs. If you’re experiencing a difficult situation that hinders your ability to repay, contact your lender to see how they can help with a deferment or forbearance option.
Adjust your student loan payments
By adjusting your payment schedule, you may save on the interest you pay over the life of the loan. Wells Fargo provides a range of student loan repayment options. Also, try to take advantage of any discounts your lender offers, such as automatic payment enrollment or graduation discounts.
By creating a realistic repayment plan, you can focus on creating a successful and healthy financial future.