student loan debt relief
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1. Assess the rest of your situation.
The situation is different for everyone, so it is very important to assess your unique situation in order to determine how much you must pay to repay your student loan relief. Consider the following:
Does it depend on you financially on others (for example, spouse, children)?
How much are your main accounts? That is, what is your naked budget?
How much do you have in savings?
Do you have health insurance, rent or any other types of insurance?
Do you live in district with a high cost lifestyle?
Is your employment situation stable, that is, stable, as any work can be?
Do you have another debt, such as car loans or outstanding medical bills?
All of the above affects how much you owe and how much you should save.
Dave Ramsey, who helped many people get out of debt, recommends using the Baby Steps method to save, repay debt and create wealth. He recommends starting at $ 1,000 in an emergency fund and focusing solely on paying off debt using the snowball method.
Although the advice is good, it does not take into account the unique situation of each person. As a freelancer, I do not feel comfortable with only $ 1,000 in savings. However, if you have a reliable full-time job that pays well, then maybe Ramsey’s approach makes sense.
In any case, it is important to have some extraordinary savings, since emergencies are inevitable: car accidents, the death of loved ones and sudden illness among many others. But there are other things you might want to save, such as retirement or a trip.
The key to saving is a balanced satisfaction of your financial needs so that you are prepared for emergencies, in order not to set yourself up for debt and not take steps to achieve your financial goals.
If you are particularly focused on repaying your debt as soon as possible, then make sure that you are ready for life to be thrown at you, and also that you are not leaving money on the table.
2. Do a gut check
Because personal finance is inherently personal, it is important that you do a bowel check: how do your student loans make you feel?
Why is bowel checking important? Because you will not achieve any progress in achieving any of your financial goals without motivation. You need to know what inspires you at the end of the day.
For example, do your student loans make you physically sick? Do you have to sleep at night because of them? Are they a constant source of stress for you? In each case, I was there. I learned that one sure way to handle is to use these emotions to fuel debt repayment.
However, if you are locked in a good plan with a good interest rate and do not mind your repayment period, then why not focus on building wealth through savings and investments?
“I’m a big supporter of student loan repayments while building up your assets,” says Shannon L. Maclay, founder of Next-Gen financial corporation. “This has the same effect on your net worth as compared to just paying off debt; nevertheless, you like not only the financial gain from cash to protect you from further debt, but also the psychological gain from growing your bank account. ”
The key is to try to find a balance between paying off debt, saving for short-term and long-term goals and investing. This is a fragile balance that is always personal. All make another plan.
So, if you are wondering how much you should pay for a student loan, use these tips to develop a plan that works for you. Just make sure you have money accumulated for emergencies. To play it safely, you can save 10% of your income, invest another 10% in 401,000 with a match and put the rest to pay off your debt.
No matter what you decide to do, make sure your plan meets your goals and supports your values. Make sure you feel comfortable with your plan and understand that it can change over time, as your life and goals also change.
Related : Student Loan Payment Calculator
For more info : https://studentloansresolved.com/
If you are suffering from student loan debt, like a staggering 40 million Americans, then you may be afraid of plunging into the credit card scene for fear of even more debt. Or you may simply wonder what is the point of using a credit card when debit cards do many of the same things.
Although there is always the threat of credit card debt, if you are responsible for your finances and make credit card payments on time, getting a credit card can be a reasonable financial step. Not only is it desirable to adapt to using a credit card responsibly, but it can also help you build your credit.
To help you make your decision, here are some pros and cons of getting a credit card to pay off a student loan debt:
Reasons why you must pay your loans before you get a card
1. You do not care about your expenses. If you have a credit card, research shows that it is much easier to spend on something that normally would not have, especially if you have a substantial balance. You can easily get credit card debt in addition to student loan debt. The average APR credit card throughout the country is about 15%, while student loans are much lower.
2. You are worried about timely payment. Using credit cards can divert attention from your debt repayment strategy. You already have one bill to remember every month: your bill for a student account. Sometimes adding to a credit card or a few credit cards makes it more difficult.
3. You have yet to learn discipline. When you fulfill all efforts to repay student loans, you develop a level of financial discipline. Because of this, you will be less likely to get into a debt trap with credit cards if you wait to use them until your loans are repaid, because you will know how difficult it is to get out of debt.
Reasons why you should not pay your loans before getting a credit card
Continuing the list, here are the positive sides of getting a credit card:
4. You want to create a credit history. Credit cards, along with your student loan history, help build your credit if you use them responsibly. Credit cards are considered to be a revolving loan (without a predetermined loan or repayment schedule), as opposed to student loans, which are considered to be installment loans (with a fixed balance to return to a specific time). A revolving loan and how you use it is 30% of your FICO credit score, so it is important to pay the balance monthly.
5. You want to track expenses. Credit cards, when used properly, can help you keep track of your spending habits in such a way that cash use cannot. A debit card can do the same, except for debit cards, there may not be so many built-in benefits and protections as credit cards.
6. You need free benefits and benefits. Speaking of built-in credit card protection, many credit card companies automatically include such things as car rental insurance or travel insurance. Types and amounts of protection vary by card, but they are quite common in all types of credit cards.
7. You learn to be financially responsible. If you can process a credit card, and not overspend, and do not forget to make your payments every month, then you are certainly ready to make a plan to aggressively pay off student loans.
Ultimately, the choice of whether you should pay off your loans before applying for a credit card depends only on you.
When you get your first card, use it for small purchases, for example, go to a grocery store or get gas so you are used to using it and paying for it in a timely manner.
It is also wise to set up your credit card for automatic minimum payment. Although we strongly recommend fully paying off your credit card every month, automatic backups are excellent if you forgot to pay.
Remember that your payment history is 35% of your credit score, so first of all, make sure that you always pay your credit card on time every time.
With these tips, you should be on the path to responsible card ownership, regardless of whether you wait for your student loans to pay off to apply for them.
For more info : https://studentloansresolved.com/