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If you graduated from college this past May, your student loan grace period is slowly winding down. Once the waiting period over, you will have to start making payments, including on accrued interest. Right now, your loans might not seem that bad. However, once that first installment becomes due, and you see how much you owe, you may be shocked at the cost and might be scrambling to pay your bills.

While facing a hefty student loan balance can be scary and overwhelming, you can prepare yourself and efficiently manage your debt by being proactive. These four steps will help you figure out your options, lower your interest rate and even decrease your monthly payment.

  1. Know your debt: Depending on your situation, you may have several loans rather than one big one. It is common to have a mix of federal subsidized, unsubsidized and private loans. Sometimes, these loans will be held by different lenders, and you need to make payments to several different places. If you did not keep all of your loan information when you took them out, keeping track of them all can be tricky. One great resource is the National Student Loan Data System (NSLDS). NSLDS is a database of all federal student loans. By entering your information, you can find out how much federal debt you have. If you have private loans, you can find out whom you owe by checking your credit report. You can access it for free at AnnualCreditReport.com. It will list all of the debt under your name, including your student loans. Once you know all of your lenders, you can sign up on their websites for online statements and automatic payments.  
  2. Sign up for autopay: Keeping track of all of your monthly bills as well as your loan payment due dates can be frustrating. By signing up for autopay, you can establish a day where your lender automatically deducts your monthly payment from your bank account. This minimizes the risk of you forgetting a payment and racking up late fees. Additionally, many lenders offer incentives for autopay; some will drop your interest rate by half a point when you sign up. While that does not sound like a lot, the difference can save you a lot over the term of your loans.
  3. Consider refinancing: Depending on the kind of student loans you took out, you could have debt with interest rates as high as six to ten percent. Moreover, if you had to borrow a significant amount, your monthly payment may be more than you can afford on an entry-level salary. Refinancing your loans is a way to lower your interest rate and/or lower your monthly payment. By refinancing, you can get an interest rate as low as two or three percent and extend your repayment term to 20 or 25 years, cutting your payments down significantly. That can free up money in your budget, giving you some breathing room to afford rent, utilities, groceries, transportation and other essentials.
  4. Learn about income-based repayment: One in six borrowers are in default, meaning they have not made payments on their loans. However, many of those people could have avoided getting behind on their debt if they knew they might be eligible for income-based repayment.  Under the standard repayment option, your payments are spread over ten years. With an income-based repayment plan, your loans are capped at a percentage of your discretionary income and the repayment term is extended to 20 or 25 years, lowering your payments dramatically. While you will pay more in interest over the duration of your loan, it can be a great option if you cannot afford to make your payments. Once you have moved up the corporate ladder and are more financially secure, you can make larger payments and accelerate paying off your debt.

In college or graduate school, student loans can feel very abstract. After graduation, reality sinks in when the grace period is over, and payments become due. It is easy to feel so overwhelmed and confused that you do not know where to begin. However, not addressing your debt can have serious consequences, from lowering your credit score to having your wages garnished. Instead, take charge of your loans and make sure you are an informed borrower as you begin repaying your debt. By following these four steps, you can better manage your payments, stay current on your loans and free up money in your budget. 

Dave Rathmanner is a staff writer at LendEDU, an independent marketplace for student loans and student loan refinancing.

LendEDU is a River Valley Media Group content partner providing general news, commentary and coverage from around the Web.

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