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Take Control of Your Student Loans in 2021

Assess Your Current Loan Situation

Before you can develop a solid repayment plan, you need to understand your current loan situation. Take a closer look at your loans: are they private, public, or a mix of both? Are you taking advantage of the federal student loan payment suspension and 0% interest offered as part of the COVID-19 relief package?

Maximize Your Savings

With student loan payments on hold, you’re likely saving some money. But what’s your plan for those savings? Are you building an emergency fund, investing, or tackling high-interest debt? Take a moment to think about how you can make the most of this opportunity.

Get Ready for Payments to Resume

Federal student loan forbearance won’t last forever, and you don’t want to be caught off guard when payments resume on October 1. Make sure your contact information is up-to-date on your StudentAid.gov profile and lender’s website, so you don’t miss important notifications. Mark your calendar for your first resumed payment and plan to redirect your funds accordingly.

Re-Evaluate Your Repayment Strategy

It’s time to reassess your repayment plan for your collective student loans. You have two primary options: the Debt Avalanche and the Debt Snowball.

Debt Avalanche: Save Money in the Long Run

This strategy involves focusing on your highest-interest debt first, saving you money on interest over time. Pay as much as you can afford towards your loan with the highest interest rate, while making minimum payments on other debts. Once you’ve paid off the highest-interest debt, move on to the next one, and so on.

Debt Snowball: Build Momentum and Stay Motivated

This approach involves tackling your smallest debt first, wiping out individual debts quickly. Pay as much as you can afford towards your lowest student loan debt, while making minimum payments on other debts. Once you’ve paid off the smallest debt, move on to the next one, and so on.

Choose Your Path

Which strategy makes the most sense for you? Do you need to build momentum or pay off your student loans as quickly as possible? Consider your goals and priorities when deciding on a repayment plan.

Additional Considerations

Before you finalize your plan, keep in mind a few additional factors:

• Forbearance: Learn more about federal student loan suspension and its implications.
• Refinancing: If you have private student loans, refinancing could save you money in the long run. However, if you hold federal student loans, now may not be the time to refinance.

By taking control of your student loans and developing a solid repayment plan, you’ll be well on your way to achieving financial freedom. Schedule a complimentary call with a SoFi Financial Planner to create a personalized plan tailored to your needs.