personal finances — December 05, 2016

4 Year-End Student Loan Tips

by Susannah McQuitty

A woman stands on a bridge with her hands raised high, overlooking a small town below.

Tired of those student loans hanging over your head? Sometimes life gets in the way and you just don’t have time to think about paying off student debt – but now Christmas is coming up. You have presents to buy and need to figure out how much you can spend, so it’s more important than ever to get real with your financial situation.

Check your loan balance and crunch numbers

Sometimes, just checking to see how much money you’ve received from your student loans can be a bit intimidating – especially because you get the feeling it’s going to be a fairly large amount. That may be scary, but it’s all downhill from there. Whether you check online or with a banker, your biggest enemy is being uninformed.

“An investment in knowledge pays the best interest.”

Catch up on payments

But it’s Christmas! Well, yes, but all that holiday cheer could easily turn into holiday tears (yes, go ahead and groan) if you spend money you don’t have. You could even use the holiday as a way to get caught up: Your family may be willing to swap giving you presents for helping you get back on track with your payments. Either way, don’t let Christmas put you deeper in debt for the sake of tradition.

On the plus side, you can get a tax deduction for paying interest on student loans. Year-end tax savings are always great, since they can help lower your tax bill, and any money saved could also be put toward paying off the loan. Check out more information about student loan interest deductions here.

A woman sips coffee on a blanket outside with her tablet in her lap.

Check your repayment plan

One of the best ways to make paying off your student loans easier (especially if you’re falling behind on payments) is to check your repayment plan. You can adjust how much you pay per month, and changing your plan is free. It’s a good idea to make your payment an amount you know you can afford, and plan to throw extra money in with the bill when you know you can spare it, rather than set your monthly payments at a high goal and falling behind. Since you’ve done a little number crunching, you should be able to adjust your plan accordingly.

Understand what’s best for your own situation

Now, I’m not telling you to cut off your heat and water until the whole loan is paid off this holiday season. Living expenses are just as important as paying off debt; what I’m talking about is being honest with yourself about your spending instead of breaking the bank to nab every last holiday sale – which is tough, but really pays off in the long run.

All in all, student loan debt isn’t a fun beast to deal with, but any kind of debt can be beaten if you come up with a good strategy – like doing some simple debt housekeeping chores to prep for your 2017 New Years’ resolutions.

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