Effectively Paying Down Debt | 10.26.09

Posted in Private Student Loans, Student Credit, Student Loans By Kristin Morris

Bill and CheckIf you are like me you probably graduated from college with two things; a diploma and a pile of debt. It is completely normal for students to have federal student loans and private student loans to pay off after college, but on top of credit card payments, rent and insurance payments these loans can be a huge burden. There are ways to quickly pay down your debt without getting overwhelmed. Here is the method that I use:

1: Figure out your monthly income and expenses including any student loan and credit card bills. This will allow you to see how much money you have left over after the bare minimum is paid.

2: Pay at least the minimum payment on all of your debts each month. Missing any payment can negatively affect your credit score. A poor credit score will makes it hard to rent an apartment, buy a car and take out any kind of loan in the future. Additionally, if you put off making payments you will end up getting slammed with interest in the long run.

3: Without neglecting any other living expenses and a modest savings plan, use any extra money to pay off whichever debt has the highest interest rate.  If you have a lot of credit card debt it is probably best to pay that down first. Once your credit card debt is paid off, try not to accumulate any additional debt. Once your first debt is paid you can move on to using your extra money to pay off whichever student loan has the highest interest rate and so on until you are debt free.

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58 Responses to “Effectively Paying Down Debt”

  1. Reko says on March 17, 2010 at 12:11 am:

    In the economy we are currently in, it
    does seem normal for students to have debts to be payed off.
    thanks for the advice!

    Reply To This Comment
  2. Evie says on November 19, 2009 at 9:10 am:

    Eveyone NEEDS to understand that we live in the USA and you are your CREDIT. If you have no credit you are not able to have anything CASH is not always everything but your credit score is.

    Reply To This Comment
  3. stacie says on November 18, 2009 at 12:47 am:

    good advice people need to listen.

    Reply To This Comment
  4. Katelyn says on November 16, 2009 at 3:59 pm:

    this is important advice

    Reply To This Comment
  5. Danielle says on November 16, 2009 at 3:01 pm:

    Helpful :)

    Reply To This Comment
  6. sue says on November 15, 2009 at 2:06 pm:

    it so true that college student will be indebt

    Reply To This Comment
  7. anon says on November 15, 2009 at 1:42 pm:

    great advice!

    Reply To This Comment
  8. andre says on November 14, 2009 at 5:05 pm:

    ok it makes sense.

    Reply To This Comment

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