NEWARK, Del.--(BUSINESS WIRE)--For those students who graduated last spring and borrowed to help pay for college, November marks the end of the six-month grace period and means the first payment on student loans are due. That said, according to recently released research, “How America Pays for College 2018,” four in 10 families haven’t researched any repayment topics.
To help students prepare for, and responsibly manage, student loan payments, Sallie Mae — the nation’s saving, planning, and paying for college company — offers a variety of free tips, tools, and resources. The company’s managing your student loans resource is a destination for practical tools, including a monthly budget worksheet and a loan payment estimator, as well as easy-to-understand explanations of subjects, like how interest accrues, how payments are allocated to principal and interest, and how to build a strong credit history.
“For many students, paying back student loans is their first experience with managing and building a credit profile so it’s extremely important to be prepared and start off on the right track,” said Winnie Sun, founding partner and managing director of Sun Group Wealth Partners. “Developing a realistic budget and overall plan to pay back loans, including paying a little extra each month when possible, can pave the way to financial success.”
Sallie Mae recommends the following tips to help recent graduates manage payments:
Know how much and whom you owe. Understand whether loans are federal or private and how much you owe, including any accrued interest. Think about your other expenses, too. Using Sallie Mae’s budget worksheet, can help you get organized.
Enroll in auto-debit. With automatic payments, never worry about missing a payment, avoid late fees, and you could qualify for a discounted interest rate. Sallie Mae customers, for example, may be eligible for a 0.25 percent interest rate reduction when they pay on-time via auto-debit.
Consider paying a little extra and save. According to “How America Pays for College 2018,” nearly six in 10 students would prefer to make larger payments over a shorter period of time rather than stretch out payments. Making those larger or more than the minimum payments means you’ll pay off loans sooner and pay less interest. Sallie Mae’s accrued interest calculator can estimate how much you might save.
Use all or part of a cash windfall. Consider using bonuses, tax refunds, inheritance, settlements, and/or other unexpected sources of income to make a payment towards your loans.
Think long-term. Paying on time consistently can help you establish and build a favorable credit history, and that can make a big difference when applying for a car loan, credit card, lease, mortgage, or even a job. Learn credit basics in “Understanding Credit,” a handbook published by Sallie Mae and FICO.
Tap technology. If you are a Sallie Mae customer, you can make and manage payments anytime, anywhere, from your iPhone, Android or Apple Watch via the Sallie Mae Mobile App.
“Having a plan, setting priorities, and being disciplined are key components of a successful student loan repayment strategy,” said Martha Holler, senior vice president, Sallie Mae. “Our free tips and resources provide practical guidance to help customers establish responsible personal finance habits and build a favorable credit history, which will serve them well as they go on to create the lives they imagine.”
In addition, Sallie Mae also offers a Graduated Repayment Period (GRP), which allows students with eligible Sallie Mae loans in good standing to make 12 months of interest-only payments before they transition into making full principal and interest payments. Sallie Mae is the first private student lender to offer a graduated repayment option.
For more information about saving, planning, and paying for college, visit SallieMae.com.
Sallie Mae (Nasdaq: SLM) is the nation’s saving, planning, and paying for college company. Whether college is a long way off or just around the corner, Sallie Mae offers products that promote responsible personal finance, including private education loans, free scholarship search tools, free college financial planning tools, and online retail banking. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.