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4 Student Loan Tips That You Don't Need to be a Finance Major to Follow

By SoFi  
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studentloandebtmoneypile RFYour college graduation may have happened a few years ago, but like many 20-somethings and young professionals, your struggle may be real to pay off your student loans. If you’re one of the 40 million people in the United States carrying nearly $1.5 trillion in student loan debt, it’s important to keep your eye on the prize of a $0 balance.

To help you cross that finish line faster, we’re here with a simple yet valuable repayment strategy to help guide your path to student debt freedom. Who are we exactly? We’re SoFi – a modern finance company transforming the way hard-working professionals like you can reduce student debt burdens while maximizing career potential. But more on that later!

For now, follow our advice for a successful student debt repayment strategy:

1. Know what you owe.

Spend time getting reacquainted with your loans. Find your federal loans on the National Student Loan Data System (NSLDS) website. For private loans, gather your statements or check the Clearinghouse Meteor Network. If necessary, pull your credit report; all of your loans will be listed there.

Once you’ve tracked everything down, make a list of your loans and their important details—the type (e.g., Direct, PLUS, private), the balances, and the interest rate you’re charged for each. This information is key to intelligent planning, especially as you consider “adult” decisions like purchasing a car or home, getting married or having a baby.

2. Set smart goals.

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Rather than getting lost in the big picture, turn your overarching objective (i.e. pay off 50% of student loans in the next year) into smaller, more manageable goals (i.e. pay an extra $200 per month). Make the goals SMART (specific, measurable, achievable, results-oriented and time-bound), and keep them front and center.

For example, if you want to cut down on spending to better fund your student loan goal, you could write your desired payoff date on the back of your credit card to remind you of it every time you make a purchase.

3. Talk to your lender.

If it’s difficult to make your monthly payments, you may feel like burying your head in the sand and putting aside your statements to deal with another day. But the sooner you seek advice, the better.

Be proactive and call your lender to discuss whether a different payment plan will work better for your current financial situation. Perhaps you can transition to a plan that sets your monthly payment to an amount intended to be affordable based on your income. Income-driven repayment plans such as Income-Based Repayment and Pay As You Earn cap federal student loan payments at a percentage of your income. These programs also ensure that, if you haven’t paid off your loans after 20 or 25 years of payments (depending on the plan), the remaining debt is forgiven.

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If you’ve already defaulted on your loans, it’s still better to take initiative and call your lender or debt collector before they start calling you. Ask about available options, including debt consolidation or repayment plans. These representatives will work with you to establish a plan you can manage—and help salvage your financial future.

4. Consider Refinancing

Your interest rate is a big part of your total payment, so lowering it can help you save money. Loan refinancing typically requires the borrower to have a solid income, steady career and a track record of capably handling debt. So if you have a steady job and make timely payments of other loans or credit card balances, lowering your interest rate may increase your savings. It also allows you to consolidate the federal and private student loans you may have into one new loan. And who doesn’t like simplicity? SoFi not only refinances student loans, but we’re also committed to the all-around success of our members, both professionally and personally. That’s why we offer several value-added services for our members, including career coaching, unemployment protection and awesome community events in cities across the country.

Before you look to refinance your federal student loan, remember that you could qualify for loan forgiveness or income-based repayment plans. But when you refinance federal loans with a private lender, you lose the benefits and protections that come with a government-issued student loan. It’s important to know whether they apply to your situation before refinancing. If you don’t benefit from these programs, and saving money is your priority, refinancing federal loans can be a cost-saving option.

When you’re ready, do the math on refinancing your loans with our student loan calculator.

In Case You Missed It: 16 Ways To Accelerate Paying Off Student Loans in 2016

Don’t give up

Arguably the most important aspect of any student loan repayment strategy is to keep a positive, can-do attitude. While each monthly payment can feel like a drop in an ocean, sticking with it can establish momentum. Even adding an extra $10 or $20 to a payment when possible or making bi-weekly payments can help pay off debt faster.

While there’s no one-size- fits-all approach, taking time to understand your options can create a course of action that works best for your situation, saves you money over the long term, and works toward paying off loans as efficiently as possible.

Take The First Step and Learn More About Refinancing Student Loans with SoFi

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