Sometimes, life can take unexpected turns that throw us off our financial path. Bills can pile up and ultimately turn into roadblocks to getting back on track. Clearing these hurdles can be daunting, but it’s certainly not impossible. If you’ve fallen behind on your loan payments, we have five tips to help you chip away at the overdue amount and get yourself back to current.
Please note that, while we have compiled some helpful information, Climb is not a financial advisor. You should consult a professional if you have any questions or concerns about your finances.
Track your spending
First off, you’ll want to compile a detailed account of what your expenses are, whether they’re groceries, restaurant visits, medical expenses, utility bills, coffee runs, or anything else. This way, you’ll be better able to determine where it’s possible to make cuts. There are multiple strategies for expense tracking — such as spreadsheets, banking and money management apps, receipt records, and more — so you can find the method that best suits you and your needs.
Create a budget
Once you know where your money’s going every month, it’s time to set up a budget. Figure out which expenses are necessary and which can be reduced in order to free up more finances for loan payments. Then, create a plan for how much is going to be spent each month on each item. If you need help starting and maintaining a budget, check out our list of helpful tools below!
Pay more than the minimum, if you’re able
Every amount you put towards loan payments gets you closer to paying off the debt as soon as possible. If you pay more than the minimum due each month, anything above that amount will go to the principal balance and lower the overall total. Of course, depending on your financial situation, it may not be possible to pay more than what’s owed, in which case it’s still important to make the minimum payment — but whenever you’re able, it may be beneficial to increase the amount you send.
Set up autopay
If you have trouble remembering to make a payment manually every month, it might be beneficial for you to sign up for automatic payments. This way, you won’t have to worry about losing track of the date, and a set amount will be paid automatically every month. Additionally, Climb borrowers receive a 0.25% interest rate discount, for as long as they’re signed up for autopay!
Find a student loan counselor
Student loan counseling can be a useful tool when it comes to managing your finances. With a variety of both free and paid options available, you can look around to find the one that works best for you. However, it’s important to be cautious when signing onto a service and to be wary of potential scams — for more info on finding a counselor and what questions to ask when evaluating options, click the link below!
Apply for a deferral
A deferral is a temporary reduction in your student loan payments. While federal student loans work differently, with private lenders, availability and terms vary. It’s also crucial to keep in mind that interest typically accrues during the deferment period. Depending on the organization, you may need to apply with documentation showing your need for assistance. Then, once approved, your account can be brought to current as long as you adhere to the payment agreement.