Debt management tips for students – Safeguard your credit score
Student Loan Help
With the increase in the education costs and tuition fees in the US, there are increasingly large numbers of students who are not being able to cope up with their college education. As the debt obligations are rising in the US, the parents who have college-going kids are not being able to manage their multiple debt obligations.
Managing student loan debt is extremely necessary for a student as their credit score holds utmost importance to shape up their future life. Debt management is an art that should be mastered by all students in order to avert the risk of hurting your credit score. If you’re not aware of the debt management tips that you should follow in order to avoid falling in student loan debt, here are some tips that you should consider.
- Determine your loan affordability: The foremost step that you should take is to determine your loan affordability so that you know the amount that you should borrow in accordance with your income. Check your income and your expenses so that you’re able to borrow exactly the amount that you can afford to pay back. Taking out loans beyond your affordability is a mistake that every student should avoid.
- Live within your means: Entering college means tasting financial freedom. While some have control on their finances, some others don’t and they’re the ones who incur debt within a very short span of time. Learn to live a life within your means so that you can keep aside some money in your bank account that can be useful when you have to make repayments towards your debt obligations.
- Save money as much as possible: You should save as much as possible so that you have enough funds from which you can repay your multiple student loans. Unless you save at least 10% of your monthly income, in the form of allowances or income from part-time job, you won’t be able to manage your soaring debt level. When you don’t have anything of your own, you’ll have to seek help of the professional companies.
- Speak to your lenders: You can also negotiate with your lenders in order to tell them about the financial hardship that is barring you from making timely payments towards your debt obligations. They might help you with a hardship plan through which you can make timely and affordable monthly payments throughout a stretched period of time.
- Opt for consolidation for federal loans: You can also opt for direct debt consolidation if you owe debt on federal student loans. This is a master loan with lower interest rates and that helps you combine your payments into a single monthly payment.
Therefore, when it comes to debt management, make sure you follow the above mentioned steps to protect your credit score.