Do you have student loans you wish you could pay off? Welcome to the club.
Among the Class of 2018, 69% of college students took out student loans. In fact Americans currently owe more than $1.56 trillion in student loan debt. With student loan debt averaging $29,800, many college graduates are struggling to pay off student loans and other financial obligations.
The two largest payments most people have to worry about each month are housing costs and student loan debt. So how do you pay off student loans and afford a comfortable housing payment at the same time?
Here are a few helpful options you might try:
1. Budget.
First off, start by organizing your finances. Use RentPlusMoney to budget your expenses and figure out how much you can afford to put towards rent, student loan payments, and other expenses.
Ideally, your combined housing payment (rent) and total debt (student loans and credit cards) shouldn’t be more than 40 percent of your pre-tax monthly income. However, with lower starting salaries, high debt payments and rising rental fees, it can be hard to stay under 40 percent. If this is the case, it might be helpful to explore other options like refinancing to reduce your monthly payment amount.
2. Consider Refinancing.
If you’re struggling to make your financial payments, you should consider refinancing your student loans. You can refinance your loans by consolidating them into a single private loan with a more flexible repayment term. Consolidating your loans can make your life easier by giving you one loan payment each month instead of a dozen. Look into refinancing and decide if this is the right option for you.
3. Report Rent.
Refinancing your student loans for a lower payment or reduced interest rate can be really hard if you don’t have a strong credit history. Start building your credit history as soon as you can to give yourself a leg up when it comes to refinancing. Reporting your rent payments via RentPlus can build your credit score and help improve your refinancing options.
With the average monthly student loan payment at $393, many people are struggling to make their on-time student loan payments each month. But if you follow these tips, you can start paying off your student loans and be well on your way to financial freedom.
