John J. Bowman Jr

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John J Bowman Jr Accountant - Pittsburgh PA - How To Plan For Student Loan Payments

March 25, 2020

How To Plan For Student Loan Payments

Many students get out of college and realize that they need to pay off their loans. With colleges sticker prices on the rise each year, it’s easy to feel overwhelmed by student debt. However, if by applying these tips, students can plan for debt and pay off their loans as quickly as possible. 

Consider Refinancing Your Student Loans

Some people may not know where to start, especially if their student debt is going to be quite high. If you fall into that camp, you could look into refinancing your loans. Refinancing your loans means that you use another loan to pay off your student loans.

If you have a stable job and you can find loans with lower interest, then you may want to refinance. This way, you pay off the student loans and then don’t have to pay as much money over time when you work on the other loan.

Set Money Aside Each Paycheck For Your Loans

You should focus on budgeting your money so that you can set aside some of that income from each paycheck. This way, you can always pay off that set amount with each paycheck. Such a consistent system will go a long way in helping you pay off those loans.

Some people may worry that it would take too long to use this approach, but consistent payments do offer a tremendous benefit. Yes, it may take some time, but this method helps you calculate when you’ll have that debt paid off by. As your financial situation changes, you can accurately pivot and recalculate to get a clear picture of your debt payment schedule.

Prioritize Your Student Loan Payments

People tend to push their loans to the side, but you need to prioritize your loan payments. Sure, you can buy a new phone or gourmet coffee, but you should consider putting that extra money towards your loans. If you prioritize your payments, then you can put all your extra money towards your loans. This will help you to pay them off sooner and reduce interest.

Conclusion

While student loans are scary to think about, keep in mind that you can pay them off with careful planning. Look at how much money you make, set aside specific amounts and continue to prioritize your loans until you pay them off. This way, you can overcome your loans and start saving money for life’s next big adventure.

April 24, 2019

Student Loan Myths

Student Loan Myths

Many people take out student loans in an attempt to ensure they earn more over their working lives. Overall student loan debt in the US is now more than $1.5 trillion. Those in such debt generally have a great desire to pay it off. This leads to many myths around the subject of student loan debt. Here are a few to avoid.

You Can’t Pay Student Loans Early

There is a common myth that says you have to pay the stated amount each month and that it’s impossible to pay off student loan debt early. This is not the case. It is indeed possible to pay extra and take care of student loans before the actual term of the loan is finish. There’s no penalty for paying early, and you may be able to save thousands in interest costs in the process.

You’re Stuck With Your Interest Rate

Student loans can come from the government, and they can come from private lenders. Those who take out loans from multiple lenders will likely get stuck with a variety of interest rates. Private loans can come with higher interest rates, but there’s no need to be stuck with a bad rate. It’s possible to refinance these loans and save money in the process. There is the possibility to consolidate the loans into one loan if you have a good credit score.

You Can Skip Payments

Some borrowers are stuck with very large student loan payments each month. There is an option for income-based repayment plans. Others might think skipping a payment or two is a good idea from a cash flow standpoint. Actually, this idea could not be further from the truth. Going into default on a student loan will hurt your credit score. Additionally, the interest will continue to compound on the unpaid amount, which will increase the amount of debt you actually owe.

Public Service Forgiveness Is Free Money

There is a program in place that allows borrowers who work in public service to have their student loan debt forgiven after spending 10 years serving the public. However, contrary to popular belief, this is not free money. You’ll have to claim the amount of the debt that gets discharged as income on your tax return, and you’ll owe taxes on that amount.

Student loans can be scary. The amount that college students are willing to borrow has grown in recent years. There are many myths that surround repayment. Don’t get caught up in believing them. They can wind up costing you even more money.