Graduation day seemed like it would never come. As a freshman, you saw seniors swaggering about like they owned the place. Then, just a few short years later, there you are. You’ve crammed for your last final, written your last paper and said tearful goodbyes to your friends. For many graduating seniors, though, leaving college isn’t “real” for quite some time.
For many college students, the reality of moving on from college doesn’t set in until they get their first billing statement for their student loans. Seeing a balance of $30,000 can make the gravity of adult life hit home in a very real way.
It’s easy to put making the minimum payment on auto-pilot and to treat your student loan bill like your cellphone bill or rent payment. It gets sorted into the pile of bills to pay and never gets a second thought. However, you might be leaving money on the table. Check out our top two tips for saving money on your student loan debt:
1.) Automatic bill pay
Your student loan provider is a business, and they’re out to make money. All aspects of their operations, from the materials they send you when you start borrowing to the bills they send you each month, are marketing materials. They’re designed to maximize profit. That can mean keeping you paying the minimum amount for as long as possible.
That’s why their bills make it as easy as possible to pay the minimum and require extra work to pay more than that. They want you to pay the “amount due” every month. It’s more profitable for them that way.
You can get the advantage back by setting up automatic bill pay with your credit union. When you do, you can designate an amount of your choosing to be paid to the lender every month. You can pay your bill back at your own pace, hopefully paying more than the minimum, and save some money on overall interest while you’re at it! As a bonus, you can often get around nuisances like “technology fees” with automatic bill payment.
2.) Consolidate and refinance
College is about the journey, not the destination. If your journey was a longer one than usual, you may have debt from several places. You may have used your credit card to finance your living expenses or taken out unsubsidized loans from private lenders. These variable interest rate loans can really hurt you financially.
It might be time to consider refinancing. You can take out a personal loan for all your outstanding debt and consolidate it into one monthly payment or possibly save money by refinancing your student loans. You can lower your interest rate and simplify your financial life at the same time!