Consumer Advocate: Expert tips on paying off student loans
It's graduation season.
While there's much to be proud of, there's also much to pay off.
The average student graduating this weekend has more than $30,000 in student loan debt.
How do you begin tackle those monthly payments?
Deputy Director of the Rhode Island Student Loan Authority Noel Simpson said your first task is to figure out exactly what you owe.
“The more that the student loan borrower knows up front, that reduces that anxiety level,” said Simpson. “Knowledge is power.”
Some loans come with a six-month grace period, while others require immediate repayment. In most cases, the sooner you can start making payments, the better.
“Payments that students and parents can make during that in school grace period would reduce the overall debt burden,” said Simpson.
According to CNBC, most lenders will work with you to create a payment, based on your income.
If you're still looking for a job, apply for loan deferment or interest-accruing forbearance.
If you've got a job, talk with your employer. Some companies will chip in.
“They're finding that especially with younger employees today, one of their big concerns is paying for their student loans,” said Simpson.
Sign up for auto-pay. You'll never miss a payment, and you might get a better interest rate.
Then, once you prove you're a reliable borrower, look into consolidating your loans or refinancing with a private lender.
“Consolidating or refinancing your loan can save you money over the long term in total debt service,” said Simpson.
If you can swing higher monthly payments, consider shortening the term of your loan, as well. You'll likely save quite a bit on interest.