How-to Shrink Student Debt: The Post-Graduation Problem

Posted on: in [ Budgeting, Financial Education, Personal Finances ]

How-to Shrink Student Debt: The Post-Graduation Problem

You’re officially a graduate – congratulations! You’ve made your way through the waters of collegiate academia and navigated your way to success. With your education in hand, it is now time to take on the world, and find your place within this strange new post graduate reality.

Unfortunately now that college is over, the interest on a majority of your student loans may start to kick in. Discover how-to pause your increasing loan interest, and maximize your efforts to pay off your student debt with these easy steps courtesy of State Bank. 

  1. Adopt the Snowball Method

Instead of listing them highest to lowest by interest rates, arrange loans from smallest to largest. Paying off a handful of small debts in the same time it’d take to chip away at a large one eases burdens, yields immediate results, and provides motivation to continue shrinking your debt.

  1. Establish an Emergency Fund

Unexpected events can take a harder hit on your available income than any unbudgeted spending habits ever could. Even if you’re juggling several debts, work to set aside $1,000 as soon as you can in a separate emergency checking account. As you chip away at remaining loans, this cushion can protect repayment plans from being flattened by a faulty car battery or flooded basement.

  1. Increase Your Payments

If you’re on a 10-year installment plan, you’re paying a decade of interest on top of your original loan. When possible pay back more than the minimum agreement each month to chop off extra time and interest.

  1. Make Payments More Often

When coupled with an increased payment amount, adding an additional number of payments each month can help accumulate less interest, and lessen the time of your payment plan.

  1. Evaluate Progress Monthly.

Creating a multi-year financial plan for eliminating debt is the first step, but not the only one. Perform a monthly check-up on your plan to continue decreasing your student debt. This monthly refresher can also provide a boost of encouragement when you see progress and spot ways in your new financial routine to make your strategy even more cost-effective.

With these five key steps you can become a master of money management, and work to exponentially pare down your student debt. While student loans may seem over bearing at first, there’s a method to the madness. If you have questions on how to make the best plan to shrink your student debt, meet with one of our experienced lenders to help develop a plan that meets your individual needs. We’ll help you get started on this new post-graduate route to success.  

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