How to Prepare for Resuming Student Loan Payments

1. Know Your Outstanding Balance:

If you are unsure about your outstanding balance, now is the time to find out. Ignoring it is not the solution. Knowing how much you owe will help you prepare a budget and determine how much can be paid per month. Review your loan status through the National Student Loan Data System (NSLDS) or contact your loan servicer if you are unsure.

2. Re-Evaluate Your Budget:

It’s been a while since you had to make student loan payments, so you need to evaluate your current budget. The best way to do this is to write down the monthly income, expenses, and debts. This would give you an accurate picture of your finances and help you identify areas you can reduce your expenses. You can use budgeting tools like Mint or Personal Capital to create a budget.

3. Identify Repayment Options:

There are several repayment options available that can make the loan payment process easier. Enroll in automatic payments, which can provide an interest rate reduction and ensure timely payments. Another option is to consider an income-driven repayment plan, which bases your payments on your income. This can be especially helpful if your current salary is less than what you expected. There are several repayment plans, and you should analyze which suit your needs.

4. Rebuild Your Emergency Fund:

If you used your emergency fund during the pandemic, it’s time to replenish it before resuming student loan payments. Building your emergency fund will provide a cushion for any unexpected expenses that may arise during monthly payments.

5. Seek Professional Advice:

Lastly, always seek professional advice if you are unsure about anything. Always speak with a financial advisor, nonprofit credit counselor, or financial coach. These individuals can help advise you on budgeting and repayment options, as well as aid in financial planning and debt management.