How to Manage Student Loans like a Pro

Now that you understand how student loans can affect your credit, make sure you follow a few guidelines to ensure your student loan debt only helps – not hurts.

Only borrow what you need. It might be tempting to borrow extra student loan money to pay for noneducational costs like dining out or your car payment. But since too much debt can make it harder to keep up with payments, it’s important to only borrow what you absolutely need to cover college costs. Just because you’re offered a certain amount doesn’t mean you need to take it.

Pay every bill on time and in full. Putting a note in your calendar two weeks before the due date for your first loan payment can make it easier for you to remember. The first payment is the payment that is most likely to be missed. You can also check StudentLoans.gov and AnnualCreditReport.com to identify any loans under your name that you may have overlooked. Once your loans are accounted for, sign up for automatic payments. Not only are you less likely to be late with a payment, but many lenders will give you a discount as an incentive.

Let your lender know if you need help. If you struggle with making your payments on time, it’s important to contact your loan servicer right away. It can help you decide whether income-driven repayment, deferment, forbearance or some other alternative repayment option is right for you. Don’t let your situation get to the point of late payments or default, because it’s much tougher to get back on track after that point.

Graduate. The idea of struggling with student loans and potentially facing default might seem scary, but you can take steps to avoid that situation and keep your loans in good standing. One way is to ensure you graduate, giving yourself the best odds at finding a job that offers the income you need to pay back the debt.

Consider alternatives. If student loan payments are too much for your budget and options with your lender aren’t helpful enough, student loan refinancing or forgiveness may offer relief so you can stay current on payments. If you’re eligible for student loan forgiveness, you can eliminate your student loan debt under some programs. Student loan refinancing can lower your monthly payments so they’re more affordable. However, refinancing can drag out payments over a longer period, increasing your overall interest cost. And refinancing federal student loans into private ones means you’ll lose federal benefits.