According Douglas Boneparth, a certified financial planner, working with Life and Wealth Planning (New York), debt remains one of the biggest financial roadblocks faced by the millennials. He opines that debt itself is that one factor which has saddled the entire generation – especially the older ones among them. Around one-third of this generation has student loan and by the time they enter their 30s, the figures are only going to worsen, with most of them paying off mortgage and credit card debts at the same time.
Provided below are a few smart strategies with the help of which millennials can beat their debts. Do read on in a bid to discover.
Millennials: How can you beat your debts?
Your debts necessarily don’t have to overwhelm you. There’s so much that you can do to ensure that you’re right on track as far as repayments are concerned! Follow these tips and you are sorted!
Find out about the income-driven plans
One of the best ways to deal with the student loans is to resort to the Income-based Repayment Plan. In fact plans like IBR (Income-based Repayment), Income Contingent Repayment and Pay As You Earn are tailored for those struggling with their student debt management efforts. Your payments are calculated based on your income. If you are able to repay on time for 20- 25 years then you might as well see your remaining loan balance forgiven.
Try to negotiate higher pay and pay off your debt as quickly as possible with the extra income.
Avoid high-paying loans
Fast loans ! The ease of accessibility of such loans has made them so popular among youngsters. If you’re above 18 and a resident of the state, chances are you’ll qualify for them and won’t even be asked why you’re taking them at the first place. You can take them to fund your college fee, to pay your rent or else to pay an installment of some other loan. However, don’t forget that they carry very high rate of interest and with the rates accruing, you may quickly find your debts spiraling out of control.
Consider refinancing or consolidating your loan
This can be done to get the rate of interest on your loan lowered. Your goal with any loan should ideally be to pay as low interest as is possible. Try to switch from variable to fixed rates. Most of the financial experts say that rates are poised to rise in the coming years, so it’s best not to fall for the common entrapment – “You will regret your decision to opt for fixed rates if the rates go down in future”.
Start shopping for the refinancing and consolidation rates online. Consider making use of the tools that will help you compare loan options in one chart.
Are you considering professional help?
Consider seeking help from a financial adviser regarding ways in which you can pay off your loans. Find out if there are people who specialize in millennial finance or not. All it takes is a little bit of patience and the right approach to get rid of your debts!