Figuring out your student loans can be a difficult and confusing process. Millions of students and families apply for loans each year, often without knowing what their best options are or exactly how to apply.
We’ve compiled a list of five Reddit student loan tips that we hope can help you through this process. Read on to learn about the steps various reddit users have taken to make the best financial decisions for themselves.
1. View all your options
There are alternatives to taking out student loans and it is good to review these options before applying for one. In this reddit post on student loans, user Betsy514 outlines some of these alternatives, including choosing a cheaper school, taking a gap year, and applying for scholarships.
We at Juno have built our scholarship database with over thousands of options you can apply to fund your education. Come and have a look here!
However, if you need to take out a student loan, which the Chronicle of Higher Education says about 60% of students do, you should explore all of your public and private options first.
Juno offers several student loan guides to help you explain your options and detail the interest rates and costs of those options:
- Guide to Student Loans
- Guide to Student Loans
- Guide to MBA Student Loans
Researching your options is an important step in ensuring that you are making sound financial decisions. These options vary by school and program. For example, here at Juno, with this Reddit comment thread on student loans, we recommend that undergraduate students always explore their state options before their private options. When an undergraduate student reaches the federal credit limit for direct loans, they can turn to private lenders or Eltern PLUS loans and explore their options there. Check out our guides linked above to determine which options work best for your program.
2. Create a budget to reduce expenses
If you have student loans and are working to pay them off, creating a budget can be helpful. Budgeting allows you to better organize your repayment plan and helps set you up for financial success.
This note on a reddit advice post on student loans tells you where to start: “First, you need to sit down and fully understand your income and debt and create a budget based on your goals. It will take a long time. Here’s what you need to do. know:
What is your family’s income?
List all debts from smallest to largest and their related interest rates. Student loans and everything else except the mortgage. List the monthly expenses.
Do you have an emergency fund/how much in savings? »
An important part of budgeting is trying to reduce your spending on luxury items.
In this reddit post on student loans, user TheChilledPixel talks about how they paid $ 115,000 in student loans.
“(I) paid a large chunk (think $ 2.5k – 3k) of my paycheck right after it was in my bank account. I didn’t eat out (or take out in COVID days) very often when my friends pressured me – chose to have a home cooked meal and cook at home instead.He got super aggressive with paybacks last year, I mean how to spend lean lean. I only spent money on rent, phone, utilities, gas and groceries.
It can be difficult to budget and cut expenses, but if you have outstanding student debts, this is definitely something to prioritize. TheChilledPixel user is now completely debt free! Setting a budget and spending your money wisely is effective and can help make your student loans much more manageable.
3. Pay on time
Interest is charged on your student loan payments, so make payments sooner rather than later to avoid incurring additional fees. To make these payments in a timely manner, try to cut back on expenses, especially when it comes to luxury items.
Reddit user yes_its_him’s reddit post on personal finance stresses the importance of keeping track of your payments: “Repay them on time. It sounds crazy, but it could work! If your income allows it, pay the minimum for soft loans (<~4%). If you still have more income, pay it off faster with additional payments, especially on higher interest loans, and save money by paying less interest than you would over time.
Don’t count on student loan forgiveness and don’t defer your loan payments. Make sure you pay them back on time so you don’t pay more than expected.
4. Collect a secondary job or a secondary job
If you are having a hard time paying off your student loans using only your main source of income, consider taking up a secondary job or part-time job.
This student loan reddit thread describes various jobs and businesses that people have collected to pay off their loans, including pet sitting, bartender, on duty, and various online jobs. These online jobs have flexible hours and you can work from the comfort of your home!
If you have the time and can commit, a secondary or part-time job can be very useful, giving you more flexibility in managing your money.
5. Consider refinancing your private student loans
Refinancing student loans is not always the best option for everyone, but in some cases it can be very useful. Currently, federal student loans do not accrue interest until October 1, 2021 as part of the COVID-19 relief. However, if you are currently repaying a high-interest private loan, refinancing may be your best option, allowing you to reduce your monthly payments and save more money.
In this reddit post on student loan, user Zaerth talks about his experience refinancing his private loan. “I pay close to $900/month for my personal loans at $515/month. I extended the term of the loan by a few years to get this interest rate, but I plan to refinance again in a few years. And I can always pay more than the minimum payment. But right now it’s a huge relief. Zaerth said they wish they had refinanced years ago.
Juno can help you find a student loan or refinance a loan at the best possible rate. We bring together groups of buyers and negotiate with lenders on their behalf to save money on private student loans and private student loan refinancing loans.