As this year comes to an end, numerous individuals across the country are engulfed by the big question of student loan repayments.
The freeze on student loan repayments comes to a halt on 31st January 2022.
Though the Biden administration has expanded the student loan forgiveness to those who are in public service or working for non-profit organizations for a minimum of 10 years, the number of individuals benefiting from such relaxations is a very small percentage of the total number of loan holders.
Waiting for the administration to lower your burden of debt would only lead you to make a delay in clearing off this liability. It is high time to streamline your finances to accommodate these loan repayments in your 2022 budget.
Impact on peoples lives
Student debt has an overbearing impact on an individual's life on a long-term basis. It keeps rising with time affecting the credit score and limiting purchasing power of the loan holder. Apart from the financial downslide, students graduating with an education loan on their shoulders have a hard time finding their dream job as the pressure of loan repayment clouds their minds while taking up their first job after graduating. They are less likely to negotiate for a better role or salary. Personal milestones like getting married or having a child are pushed forward due to financial concerns. Walking this tightrope many loan holders succumb to mental health issues.
However, taking charge of the situation can get you through these overwhelming situations.
Where to begin
Get in touch with your loan provider and understand if there are any changes in the terms of your loan agreement. Request them for your updated repayment schedule. This will help you get a clear picture of your future payments and avoid any defaults.
Budget for loan repayments
Having a monthly budget of your income and expenses is always considered a wise way to stay prepared. The repayment schedule gives you a clear idea about your liability in a periodic and monetary format. Use it to draft your monthly budgets and spare yourself from any unpleasant surprises.
Prioritize loan repayments
These repayments take a major chunk of your income. So it is essential to give them priority over your other comfort-related expenses. Student loans could be your biggest liability and affect your day-to-day life on various levels. Is it worth it to keep stalling the repayments? Getting rid of your student loan will elevate your life giving you the financial freedom to flourish.
Consider refinancing
Refinancing your current student debt may seem like a chaotic process but that depends on the choice of your refinancing organization. You might come across several refinancing options, however, make a thorough evaluation before you make your decision. Your aim is to get a better deal than your existing loan agreement.
Student loan debt will continue to hover on your life unless it is taken care of. Do not wait for external factors to help you get rid of it, instead channelize your resources in the most optimum manner and you would be surprised to see the loan depleting gradually.
Please let us know how you are planning to manage your student loan debt in the comment section below.
