It is never a college graduate's dream to be bombarded with thousands of dollars of debt once they finish up their studies. But student loans are growing, with the average amount of debt for a student growing to $27,000 in 2012. Paying off student loans can be a hard task to complete, especially if you have less-than-stellar credit. But if you do not rank in the higher quadrants of credit scores, there are still easy ways to take care of loans. By following a few of these tips, you will be able to take care of your loans in no time:
Lower interest rate
There's no denying that college tuition is getting more expensive, but interest being tacked on doesn't help matters, either. Even if you have bad credit, you may be able to find ways to lower your interest rate and thereby decreasing the total amount you owe.
Many student loan lenders, including the Department of Education, offer an interest rate discount program for those that have bad credit or have had a good history of on-time payments. These discounts usually amount to 0.25 percent off, which can take off a good chunk of your loan.
Another way to make student loans more affordable is to consolidate debt, which combines several loans into a single payment. This option is much easier than making several payments and is extremely useful if you have poor credit. But before you choose this option, you should do a fair amount of research beforehand. Many federal direct consolidation loans will offer a lower interest rate for the consolidated loan, but people should be sure this is the case before signing up for this option.
Create a budget
After college, a prime objective for any graduate should be to figure out a budget. Many graduates may not have a job coming after graduation, so finances may be a little tight until they get their feet under them. While deciding on a budget, you should figure out excessive areas where you can cut from your budget. The excess money you have from trimming your budget or other entertainment purchases can go to paying off loans quicker. Crafting a budget is also a way for people with bad credit to figure out their spending habits and improve their credit score in the process.