Know your goals when paying on student loans
Student loan debt is a hot button issue in the news today. Many people with outstanding debt are left wondering what to do regarding their loans.
Student loans are necessary for so many people to receive a degree and enter the workforce, but few are educated on ways to manage student debt.
I am a financial adviser with Modern Woodmen of America based right here in the Castro Valley, and I am fortunate to be able to work with great people in Hayward, Oakland and the entire region who need assistance accomplishing their financial goals. Whether you’re just starting out or planning for retirement, I am here to help.
You have options for paying back your student loans. It’s my goal to help you understand which ones will ultimately help you reach your financial goals.
- Start making payments as soon as your loan dictates. This is my most important tip. The last thing you should do is to ignore your loans. If you don’t make minimum payments (or make alternative arrangements), it can have a negative impact on your credit score.
- Determine your payment amount based on your financial goals, the structure of your policy and your interest rate on the loans. If you have low-interest loans and you can make the minimum payment per month, consider saving additional money you can afford elsewhere instead of rushing to pay off your loans. For example, if your loans have a low interest rate and your investments have an average return that is higher, it might make more sense to make the minimum payment rather than paying more on your loans.
- Consider your ultimate goals. Some people rush to pay off their loans and forgo saving money, which is not always in line with the goals of owning a home or purchasing a business.
- Know your options. If you’re having trouble paying student loans, you may be eligible for an extended deferment or forbearance, which will allow you more time to make your payments. You also have the option to refinance your student debt and/or consolidate multiple outstanding loans.
These are just a few tips for managing student loans, but everyone’s situation is different. If you could use the help of a financial professional, I would be honored to be your financial partner. Call me today for a consultation and to learn more about how we can make a plan to conquer your loans while still achieving your financial goals.
This material is meant as general information and should not be construed as advice or a recommendation. Consult your tax advisor before making a decision. Investing involves risk, including the possible loss of invested principal.
*Securities and advisory services offered through MWA Financial Services, Inc., a wholly owned subsidiary of Modern Woodmen of America. Member: FINRA SIPC.
