3 Steps to Manage Education Finances

Student loans can be a great way to invest in your education, but paying them back can seem daunting.

No matter what, they’re an extra expense. So it’s important to have a handle on what you’re working with. Here are some tips to help you manage your student loans:

1. Know Your Loan

It’s tempting to stay away from the numbers, but it’s important to know how much you owe overall. That means, if you owe multiple loans from different lenders, you should add them all up to figure out your total debt.

Once you’ve done the math, it doesn’t hurt to re-read the conditions of the loans and the grace period. What are the interest rates? The rules for repayment? Do you have some leeway before you have to pay them back?

2. Pay Extra When You Can

You don’t have to use your entire bonus on your student loan payments or cut every cup of coffee from your budget, but even chipping in an extra $10 to $20 to your monthly payment when you can afford it adds up. That’s because that extra money will be applied directly to your principal amount, instead of paying off your interest. That, in turn, will reduce your overall interest paid.

If you’re still in school – even better! Even though you’re not required to pay back your loans yet, you’ll be chipping away at the principal balance instead of accumulating interest, meaning you’ll end up paying less in the long run.

If you’re in a pinch and don’t have extra money to do this, consider getting an additional part-time job. The extra money can help loosen up your budget or make it possible to chip in extra on your loans. The current economy has made the “side hustle” both easy to find and flexible to fit into your schedule.