Thousands believe student loan refinance is the only solution when dealing with an old and very costly student loan but in reality, that isn’t always the first or indeed a necessary step to take. Repaying a loan may take a considerable amount of time but once it’s paid off, it’s gone for good and it doesn’t have to knock your credit too badly either. However, how can you deal with a student loan without resorting to refinance? Read on to find a few simple tips that may prove useful to you.
Pay the Smallest Loan First
If you have taken several loans out, it’s wise to concentrate on the one which has the lowest amount to repay. That doesn’t mean to say you still shouldn’t make payments to any other loan you have but rather pay slightly more to this rather than the minimum payment. The smallest student loan can usually be dealt with quickly, especially if it’s a few hundred dollars. You don’t want student loans to take over your life long-term so it’s best to look into paying the smallest one first. However, if you have a loan which is ten years old, look at getting that paid back first would be a better idea so that this can be removed from your financial history quicker.
Make More than the Minimum Payment
Loans can easily overtake your life but they are often prolonged because most people pay only the bare minimum. That is good in one instance and bad in another. It’s great you’re making a payment to the loan but paying only a small amount will ensure the loan stays with you for decades. In the long-term, you’re going to pay more back in interest and sooner or later, things will get on top of you. However, if you can, make a higher payment, more than just the minimum amount. It doesn’t have to be hundreds more, ten or twenty dollars extra is good; it all goes towards repaying the loans back. Most think student loan refinance is the best solution but in this cases, not always. Click here !
Try To Negotiate Payment Amounts and Interest
This might sound a lot like student loan consolidation but it’s not quite at that stage yet. Negotiating the payment amounts and looking to lower or keep the current interest rate is an important factor to look into and it’ll help repay the loan back too. This is certainly something you must think about so that you can get the loan paid quickly. Negotiation is a wise tool but it might not always be effective; however, there is no harm in trying nonetheless.
Student Loan Consolidation Should Be the Last Resort
Refinance is truly the very last, desperate resort for anyone with a student loan. The reason why is simply because any loan you take out is marked down on your credit history and if you later refinance or consolidate these loans, it goes against you. This could potentially affect you getting another loan in the future, even if the loans were taken out twenty years ago. You have to remember lenders look into your financial and borrowing history and seeing several student loans on your history, and consolidation or refinance, it’s going to potentially cause you to be refused a loan. It’s something to think about but of course, if you have no other option then refinancing is something to think about.
Don’t Get Bogged Down With Old Loans
When you have a student loan, you can often put repaying this to the back of your mind but is that really the smartest idea? Well, no not really. The loans are going to follow you no matter where you go and it’s going to affect your life as well. That is why it’s wise to look into dealing with these loans quickly and easily. Student loan consolidation might not always be necessary, it’s a last resort but don’t be afraid to explore if you’re struggling with current repayments.