I like to focus my posts on actual steps someone can take to solve a specific problem. If you’re looking for a critical analysis of an issue where you’re only presented with problems on top of problems, this is not for you. That being said, here are 5 Easy Steps to Consider to BEAT STUDENT LOANS:
- Free Tools – Start off on student loan comparison sites like Student Loan Hero or Credible – They offer a FREE analysis of your student loans and collect different loan rates from several certified trusted lenders. It’s an easy and free way to see all your options!
- Research and Select a Lender – If you see a refinancing option that significantly lowers your interest rate and the lender has great reviews, go for it! A preferred lender for most student loan refinancing based on ease of use and low interest rate is SoFi – (sofi.com/share/409340).
- (*TIP: Your able to individually pick which loans you want refinanced; so pick the loans with higher interest rates and reduce that monster – Ex: refinance loans with a 7.5% rate or higher to the offered 5.25% fixed-rate, but don’t refinance the loans with a current interest rate of 5% and lower).
- Loan Forgiveness – Keep in mind that if you’re currently on a loan forgiveness program(i.e., government/public sector employment, military, teaching, etc.) refinancing will eliminate your benefits under these great programs.
- Don’t take on any new debt – A new car can wait, you’ll always find another dream home, and swiping your credit card is easy, but seeing that monthly statement will make you nauseous. Save your money and pay a little bit more principal off on those student loans or invest!
- Invest: There are so many free tools and apps out there that can help you save and invest with little to no risk and NO FEES. (Free is a millennial thing I guess). Here’s a few tools below:
- Want to trade stocks? Every brokerage account charges you for each buy and sell transaction. That can add up for us poor kids. Do it for FREE at Robinhood – http://share.robinhood.com./danield1160
- Invest your change from each purchase. Purchasing a bottle of water @ a whopping $1.97 – Why not invest 3 cents automatically. Companies like Acorns(https://acorns.com/invite/NYTRLR) do this service for FREE if you invest less than $10,000. If you’re investing more, God Bless You and please donate your riches!
It’s important to note that student loans must be repaid. You don’t want to shoot yourself in the foot for be “financially savvy.” One of main catalysts for the sub-prime mortgage crisis during the 2008-09 recession was the rise in “strategic default” – borrowers who didn’t pay their monthly payments even though they could afford to do so (See: https://www.forbes.com/sites/jeffreydorfman/2017/07/07/the-student-loan-default-crisis-is-being-caused-by-promises-of-debt-forgiveness/#7af61f041a46). We all know of someone whispering in our ear that “there’s no need to pay the bank, screw em.” Don’t be a fool. Unlike a traditional mortgage foreclosure where you would loose the underlying asset (your home) or elect the path of bankruptcy where all your debts could be liquidated and discharged, student loans have no such liquidation process. They stay with you until you DIE. And even after death, all your creditors will be lining up to collect from your estate.
Hope this helped!
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