How to Repay Student Debt
- 1). Compile all of your student loans and debt together. If you have more than one student loan, review your original paperwork to see if consolidation is an option for you. Consolidation turns two or more debts into one, typically lowering your monthly payment and sometimes even your interest rate.
- 2). Review any credit card debt. See if balance transfer options will work to consolidate your credit card debt as well as lower your monthly interest rate.
- 3). Begin to work on your budget once all of your student debts are organized and consolidated. Create categories for each monthly expense and analyze your past checking account statements to ensure that each monthly expenditure is included. Remember to add categories for additional debt repayment and savings.
- 4). Add up your categories to see a total of all expenses, including the additional debt repayment and savings. If this number is greater than your income, additional work must take place.
- 5). Analyze your budget and look for ways to reduce spending. Limit unnecessary spending on items such as eating out, entertainment, and cable bills. Remove additional unnecessary services from your cable bill and cell phone bill. Determine the difference between wants and needs. When making a purchase, ask yourself if the item is a want or a need. Try to stick to only purchasing needs in order to reduce your expenditures and place more money towards debt reduction.
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