Millions of Americans are preparing to pay back their federal student loans this fall. After a three-year hold, some Missourians will need to tighten their belt and readjust their budgets accordingly.
Brian Walsh is a Certified Financial Planner at SoFi who has some key tips for student loan borrowers.
“Step one is all about understanding your student loans and that may sound obvious, but it’s been three and a half years since payments have been required,” says Walsh. “Number 2 would be taking a step back and looking at your budget and your current finances to see whether or not that payment is going to fit in there. Lastly, it’s figuring out what approach do I want to take? Can I leave it as it? Do I want to focus on reducing my payment?”
There are options to lower the monthly payments. They include refinancing or extending the term of your loan.
“Whether it be income driven repayment, which kind of caps your payments to a certain percentage of your income or extending the term of your federal student loan to stretch it out further or even refinancing to a private student loan where maybe you can lower your interest rate possibly or keep your rate the same or similar and then stretch that repayment term out longer,” says Walsh.
Interest resumes on September 1 and payments will be due starting in October.
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