7 steps to effective student loan repayment

Category: Loans


New college graduates normally have a six-month transition period before they are required to start paying off their student loans.  By following some simple rules, new college graduates can make the student loan repayment process manageable by taking control of their finances. Proactively working with your lender now will make for an effective transition to repayment.

As graduates begin their careers in a complex economic environment, Sallie Mae and America Saves offer the following tips to assist borrowers with effectively paying off their student loans:

Know how much your monthly payments are

Create a budget that includes your monthly student loan payments. You may realize that you need to eliminate unnecessary expenses in order to have enough to make timely payments, or you may discover there are things you can eliminate to pay off your student loan debt even faster. Contact your lender or go to their website to determine the different payment options that are available to you and will best fit your financial situation. Doing so can save you money and time.

Put your payments on an automatic schedule

By setting your student loan payments up on an automatic schedule, you will save yourself postage, time, and most importantly, you will know your payments are always getting paid on time. Some lenders may offer a lower interest rate for enrolling in an automatic repayment plan.

Never miss your payments

Setting up an automatic repayment plan would solve this problem, but if you choose not to, just be sure to never miss any of your monthly payments.

Get help if you do fall behind on your payments

Call your lender to discuss what options are available to you. A temporary postponement of payments or a different repayment plan may give you the additional time you need. You can also consider nonprofit consumer credit counseling.

Let your lender know about any changes

If any of your contact information changes—such as your email address, mailing address, or phone number—it is important to let your lender about it. Keeping your lender updated with your most recent information will ensure that you always receive information on your student loan, including payment due dates, which can help you stay on top of your loan repayment.

Be wary of scams

There many companies that are fraudulent and offer appealing ways to lower or completely erase your student loan payments. If you have any concerns about the services that a company offers, contact your lender to confirm whether or not they’re legitimate offers.

Save up some money for an emergency fund

You never know when your financial situation might change and you might need to use all of your money one month on something else. You may lose your job. Life can be unpredictable, so it’s important to be prepared for anything that life might throw your way and have the money you need to make timely payments.

If you’re receiving annuity payments, we can purchase some or all of these future payments from you and offer you cash now. The money you receive from the sale of structured settlement payments can be used to take care of the bills that have been piling up, such as the bills for your student loan debt. Alternatively, if you are doing well with your student loan repayment plan, but do not have an emergency stash reserved in case of a job loss, you can sell your annuity payments for cash now and keep that money aside to pay for your bills should an unexpected situation arise.


Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.

Tags: emergency funds, monthly bills, Student Loans

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