The school year is in full swing, and the thought of student loans, credit card debt, and other personal loans may have you stressed out. Here are four key steps to deal with your debt:
1. Determine exactly how much you currently owe and what the interest rates and minimum payments are for each debt. An easy way to do this is to write everything down on our Debt Load Worksheet. Make sure to include all outstanding debt, including credit cards (including store credit cards), car loans, mortgages, personal loans, and student loans.
2. Try your best to make at least the minimum payment on each debt every month to avoid late fees and interest rate increases. If you can’t make every payment on time, try making payments on the loan or credit card with the highest interest rate.
3. If possible, commit extra income to accelerate your debt repayment. Once again, the best strategy is to put extra money toward the debt with the highest interest rate (after paying all of the minimum payments).
4. When one debt is paid off, use the money you were using to pay that debt to increase the monthly payment on another debt. This is called the snowball method. Continue doing this until you are eventually debt free!
If you have any questions or need help creating a debt repayment plan, schedule a free appointment with us online: https://unlsmmc.youcanbook.me/ We love helping all students, faculty, staff and alumni!
Post written by Amanda Owens, SMMC Program Assistant