by Repayable | Dec 30, 2016 | #Millenniallife, Mindset
New Year’s resolutions. Are you all about them? I’m not all about a resolution, I’m all about goal-setting. Some might argue it’s the same thing but check out the different definitions.
Resolution: a firm decision to do or not to do something
Goal: the object of a person’s ambition or effort; an aim or desired result
The reason I set goals instead of make resolutions is because a goal is something long term that one achieves from making many small decisions and taking many actions over the course of time. A resolution is sort of like, oh you messed and did or didn’t do something you resolved to do might as well give up. Goals are longer term and if you hit stumbling blocks you have an opportunity to try a new approach or shift the goal.
So with my rant about resolutions let’s get right into the two student loan goals you can set for 2017 that will begin your path to student loan liberation.
1. Know your number.
You will hear me say this time and time again but I mean it. You should know exactly how much money you owe. None of this, “I owe about $70,000” garbage. How much exactly do you owe? Not knowing your number is a form of denial. Whether you own that number or not, the interest will own you. So go to your loan servicer right now and look at your amount. Commit it to memory and look at it after each and every payment.
The reason you need to know your number is so you can pick a repayment strategy that makes sense for you. You need to know details like how fast your interest accrues, how much you owe in private vs federal loans, and what your debt:income ratio is.
2. Set a specific repayment goal.
You can set a goal to refinance, choose a different payment plan, pay off a certain amount, etc. Any of these goals have specific measurement so you can see if you met your goal at the end of 2017. Choose a goal that makes sense for you. If this is the year of building up your emergency fund it doesn’t make sense to set a dramatic dollar amount repayment goal. Be reasonable but push yourself to build forward momentum and take charge of your student loan debt.
What are your goals for 2017? Student loan related or not I would love to hear them! Comment below or share your goals on the Repayable Facebook Page. I’ll be posting a video tomorrow of my 2017 goals and reflecting on the progress I made on my 2016 goals.
Repayable is being released January 1st, just in time to set yourself up for a year of student loan success. You can pre-order the e-book here and the print version will be available for order Sunday January 1st!
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by Repayable | Dec 29, 2016 | #Millenniallife, Money Matters
Student loan misinformation abounds. It can be hard to tell what’s solid advice and what’s garbage. Read on for three pieces of advice you can throw away and three pieces you need to listen to.
1. Garbage Advice: Don’t pay on your loans until you have to.
People are telling you to take advantage of the six month grace period or take advantage of forbearance.
Good Advice: Start making at least income-based payments.
You can set up an income-based repayment plan and make monthly payments that won’t crush you. Here’s the thing, if you have a job from your college degree you should be paying on your loans. If you wait, you’re shooting yourself in the foot and accruing tons of interest and you’re also delaying your eligibility for forgiveness (most require a certain number of payments).
2. Garbage Advice: Put as much money as possible into retirement. Or Wait to contribute to retirement until your loans are repaid.
Both of the pieces of information are lacking a middle ground.
Good Advice: Put the right amount of money into retirement.
The younger you are when you put your money in retirement the more opportunity you have for that money to accrue compounding interest. That means you need to put some money away now. If you have an employer-sponsored plan like a 401K you should contribute at least enough money to get their match. Your employer’s match is free money, don’t leave it on the table. However you shouldn’t contribute more than that if your goal is to repay your loans as quickly as possible. You can guarantee that you will accrue interest on your student loans while you can’t guarantee the performance of the stock market.
3. Garbage Advice: Don’t worry about it, student loan debt is good debt.
Let’s get real, no debt is good debt.
Good Advice: Know your number and make a plan for repaying it.
It’s the easiest thing to do, to know your total debt load. It just happens to be one of the most stressful things. Go look at your loan balance and commit the number to memory. Check on it every month and notice what happens to your total amount with time and making payments. What happens when you make extra payments? Knowing your number is the very first step in building a repayment strategy that fits your goals.
There you have it, a little light in the murkiness of student loan debt advice. What do you think? Anything you disagree with? Want to share the worst advice you’ve ever gotten? I’d love to hear about it in the comments below or on the Repayable Facebook Page.
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by Repayable | Dec 28, 2016 | #Millenniallife, Money Matters
Student loan refinancing seems to good to be true. I mean how can anyone legitimately slash your interest rate and save you thousands of dollars?! It has to be a scam… right? Nope, it’s not a scam you can refinance with reputable companies and save yourself thousands of dollars, but how do you make sure you don’t goof up? Read on for four traps to avoid and four ways to get the best refinance.
*All Earnest links are my personal link. If you refinance with Earnest using the link we both get $200. I didn’t choose Earnest for the $200 referral. I chose them because they met my personal standards and gave me the best interest rate.
1. Avoid refinancing if you’re hoping to take advantage of loan forgiveness options.
A refinanced loan is a private loan. Existing loan forgiveness options are for federal loans so you would eliminate your eligibility.
2. Avoid extending your repayment period when you refinance.
Refinancing student loans is a way to repay your debt faster and more efficiently by decreasing your interest rate. Don’t use it to stretch out your repayment period or your mitigating those benefits.
3. Avoid any company with application fees, loan transfer fees, or fees for early repayment.
There are many good companies that don’t have these so don’t settle for any company that does. Your money is yours, keep it.
4. Avoid losing the borrower benefits you still need.
What borrower benefits do you need? If you’re thinking about going back to school refinancing might not be the best option because it doesn’t allow the same amount of flexibility in terms of payment deferment as federal loans. Some companies will defer loans for up to 18 months.
Get the best student loan refinancing.
1. Check out the eligibility requirements of the company.
Most lenders offer refinancing for both federal and private loans. Many lenders have minimum credit score requirements, annual income requirements, and minimum lending amounts. Some have maximum lending amounts. Find at least two or three companies whose eligibility criteria you meet.
2. Compare borrower benefits.
Choose two or three companies with the borrower benefits that matter most to you. Benefits to consider include unemployment protection, entrepreneur program (SoFi), refinancing and ability to change monthly payments (Earnest has the most flexibility), and a company that doesn’t sell your loans.
3. Choose the refinancing term and monthly payment amount that are best for you.
Some companies (like Earnest) offer ultimate flexibility in choosing monthly payment amounts. Others have set terms of repayment so you’ll want to pick the term and monthly payment that make the most sense for your financial picture.
4. Submit your application & choose the company that gives you the lowest interest rate.
You already did the vetting of each company on the front end. All that’s left for you to decide is which interest rate is lowest.
That’s your quick and dirty guide to refinancing. If you avoid the four traps and follow the four steps to get the best student loan refinancing you’ve got your bases covered. Let me know what’s stopping you from refinancing in the comments below or on the Repayable Facebook Page.
Repayable is out now and has an entire chapter dedicated to refinancing that will serve as your definitive guide. Order your copy today and being the path to student loan liberation!
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by Repayable | Dec 27, 2016 | #Millenniallife, Money Matters
When you finally graduate from college it feels like a huge accomplishment. You’re feeling excited and relieved but possibly a little anxious. All that student loan debt you’ve been using to fund your education is looming over you and needs to be addressed. But what the heck is a person to do? It’s all so overwhelming and your financial counseling was, well, lacking. Read on for the five most common mistakes new grads make and five things every single graduate should do when they graduate to make their loans repayable.
1. Using your six month grace period when you have a job.
It seems like a great idea to just not pay on or deal with your student loans for six months. I mean after all you’ve earned it right? Not so much, interest is still accruing.
2. Picking the wrong repayment plan.
Whatever financial aid said is the plan most people choose is good enough for your right? Not necessarily, each individual has different goals when it comes to repaying student loan debt. You want to pick a plan that aligns with those goals.
3. Ignoring or not acknowledging your total debt amount.
You owe a lot of money and it sucks. You don’t want to look at it. Like a child, you want to cover your eyes so it can’t see you. Here’s the thing, the debt is there accruing interest whether you acknowledge it or not.
4. Not refinancing when your goal is to repay your debt as quickly as possible.
Refinancing isn’t for everyone but if your goal is to pay off your debt as fast as possible and your debt:income ratio is good (1.5:1 or less) and you have a steady job, refinancing is likely to be a good decision for you. Not refinancing cost me over $7,000 in 2015.
5. Being resigned to a life of powerless repayment.
Your loans are too much, no one else gets it, and you got the short end of the stick. We’ve all felt the self-pity and sense of powerlessness over your finances. Staying in this mindset won’t get your loans repaid.
What Every New Grad Should Do With Their Student Loans
You’ve read the mistakes and maybe even committed some of them yourself. So what exactly should you do with your student loans?
1. Start repaying your student loans as soon as you have a job.
Whatever your repayment strategy, refinancing, loan forgiveness, or income-based repayment, interest is accruing when you’re not making payments. Six months of interest adds up quickly. Also if you’re not making payments you’re not getting any closer to loan forgiveness options which require a certain number of payments before you’re eligible.
2. Take time to consider the best repayment plan for your financial goals.
What exactly is your goal with your student loans? Do you want to repay them as fast as possible? Pay the least amount of money possible? This goal will help you determine the repayment strategy that’s smartest for you. If you wan’t to pay as little as possible a loan forgiveness option that takes 10, 20, or 25 years might be your best bet. If you want to pay them as quickly as possible refinancing may be best for you.
3. Know your number and own it.
Your unwillingness to look at your student loan debt amount doesn’t do you any good. You still owe a lot, even if you’re in denial about it. You will have to pay it back. So you might as well make your payments work as efficiently as possible for you. To do that you need to look at your total debt amount and own it. Don’t feel ashamed about it, just take care of it.
4. Check out refinancing and see if it’s right for you.
Tomorrow’s post and video will be all about refinancing so you can explore this further. The simplest explanation of good candidates for refinancing are those with higher interest loans, good credit, and good income who want to repay their loans as quickly as possible.
5. Know your power in repayment.
Your repayment strategy is in your control. You can no longer control the amount of debt you took out for your education so let it go. Educate yourself, make the best decision you can, and advocate for borrowers.
Now that you have a few do’s and don’ts for student loan repayment I would love to hear your thoughts. Have you ever made one of these mistakes? Or have you ever made a decision that really saved you some money? Comment below or on the Repayable Facebook page. If you ever have any questions you can always email me at jeni@repayable.org.
Only five days until Repayable’s release (out January 1st)! You can pre-order the e-book here.
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by Repayable | Dec 26, 2016 | #Millenniallife, Money Matters
Student loans are kind of the worst. Which means there’s no shortage of complaints. The complaints are usually valid, but that doesn’t mean you shouldn’t try to solve them. Read on for six of the most common complaints along with their solutions.
1. I have no idea what I’m doing.
Solution: Get informed. Check out the multitude of blog posts on this page, the Repayable Facebook page, or Repayable YouTube Channel for easy to digest student loan information. For super customized information you can always message me any question or post on the Repayable Facebook Page.
2. Who cares how much debt I have? I’ll be paying on it forever anyway.
Solution: Know your number. Denial doesn’t make your debt go away. If you don’t fully recognize your debt load you won’t be able to make the smartest decisions with your money.
3. We got screwed, tons of debt, and less jobs.
Solution: We did get a lot of debt and some of you graduated when the job market was tight. Today’s job market has rebounded pretty well and the skills you built during the tough job market will serve you well in the future. That grit is only going to help you.
4. College is expensive and borrowers are the only ones who care.
Solution: It’s your job to make people care. Of course they don’t care, they have no idea what it’s like to have this much debt when you start young adult life. Contact your Congressman about a student loan-related piece of legislation (there’s a whole chapter on this in Repayable).
5. Money is a sensitive subject, I don’t want to talk about my debt.
Solution: “An eccentricity made a regular thing of ceases to provoke remark.” Sylvia Townsend Warner. Start by talking about your debt with people in the same profession who are on a similar payscale. Lose the shame, most graduates have debt, there’s nothing to be ashamed of.
6. There’s nothing I can do.
Solution: There is a ton you can do. I mean there’s enough you can do that I wrote an entire book about it. You can own your number, get informed, strategize a repayment plan that’s best for you, talk to your Congressman, eliminate the shame by talking about debt. All of this can change the story of student loan debt by making it truly repayable.
There are six days until Repayable is released. You’ve made the sacrifices to obtain a quality education, but now you’re burdened with crushing student-loan debt. Digging yourself out is not impossible—and Repayable shows you how. Pre-order Repayable for your e-reader today!
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