As you near the end of your college career, your thoughts are probably shifting to finding a job. But if you’re among the estimated three-quarters of students who have taken out loans to pay for your education, you also need to start thinking about paying those loans back.
Most student loans start becoming due immediately after you graduate. Direct Federal Loans, Federal Stafford Loans, and some private student loans offer you a grace period of six months before payments begin, helping you get time to find a job and get settled.
When you get the statement telling you what you’re expected to pay each month, don’t panic. The amount may seem high, but there are a variety of options that will make it easier to repay those loans. You can choose from payment plans that recognize that you’ll make more money as you advance in your career, so payments start low and grow over time. Other plans limit your payments to a percentage of your income. Another option is to consolidate multiple loans into one loan with a single monthly payment.
You’ll have to figure out which approach is right for you. Just be sure you understand all the details before you decide how to do it. And remember that you have the responsibility to make those payments. If you don’t pay on time, your loans can go into default, and you can face legal action, as well as negative impacts to your credit rating.
How can you pay off your loans and cover all your costs? The best way is to develop a monthly budget that considers your income, your loan payments, and all other expenses.