Student Loan Repayments Come Knocking--Answer The Door!

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Student Loan Repayments Come Knocking—Answer The Door! by Don Taylor (NAPSA)—And so it begins— you're an adult and in charge of your future. After graduation last spring and six months of transi- tion time, it’s time to take on the responsibility of starting to make payments on your student loan(s). Determine how much you owe on your student loan(s) and your monthly payment. Prioritize how you spend your income. Discretionary spending, like eating out, takes a backseat to paying your bills. Put together a spendingplan. List your monthly income and how you’re going to spend the money. Housing, food, utilities, student loan payments, car and credit cards are all mandatory spending items. Pay rent andutilities before you pay your loans, but the loans still need to be paid before buyinglattes. If you still have moneyleft to spend, you have choices. An emergency fund should come first because that provides the financial cushion against uncertainty in your life. Then decide between additional student loan payments and yourdiscretionary spending. Graduates have a lot of competing claims on their income: a new car, a place to live and furnishing that place. Look at ways to economize to free up income. Buying a used car and buyingfurniture at a consignment shop can save hundredsof dollars. Your student loan payment history gets reported on yourcredit report and is used to calculate your credit score. A credit score will influence your ability to get ad Don Taylor says your student loan payment history gets reported on your credit report, and is used to calculate your credit score. other forms of credit as well as auto insurance, and could even impact a job search. Your goal should be to always make your student loan payments in full and on time. Consider making your student loan payment electronically. Some lenderslike Sallie Mae may even offer an interest rate reduction if you sign up for automatic debit. Don’t panic if you can’t figure out how you’re going to make your loan payment. Talk to the lender about your situation and discuss whetherthe loan offers alternative payment plans or temporary options to postpone payments that you can use to give yourself some breathing room, but then as soon as feasible, resume making regular payments to avoid extra expense. Don Taylor is a CFP professional who teaches at Penn State University and writes a daily personal finance advice column for Bankrate.