As student loan payments resumed on October 1, 2023, reassessing your monthly budgets is now more crucial than ever. Like other borrowers, meeting all your expenses is likely on top of your concerns after a temporary freeze on student loan payments and interest rates.
Many borrowers are already dealing with financial strain, even without student loan payments. Thankfully, various budgeting apps are available to help borrowers organize finances and manage repayment obligations comfortably.
In this article, we’ll walk you through specific tips on how you can use budgeting apps to repay your student loans.
Understanding How the Resumption of Student Loan Repayment Affects You
With already constrained budgets, you may feel overwhelmed now that student loans are accruing interest again. According to The Washington Post, this change could mean an extra burden of around $300 on the monthly budgets of millions of individuals.
The impact of the resumption can be monumental if you have incurred additional debt throughout the payment pause. It can cause you to miss payments on credit cards and other debts, such as mortgages and auto loans.
Many strategies can help you manage multiple debts, including student loans. Suppose you’re carrying a pile of student loan obligations. You have the option to refinance student loan. Still, learning how to fit your student loan payments into your budget is essential.
Balancing your income and expenses can ease the burden of paying down your student loans and other debt obligations. Read to learn how to tackle your student loan debt confidently using budgeting apps.
Tips on Using Budgeting Apps To Repay Your Student Loans
Establishing a budget for your student loans is vital to the repayment process. However, fitting these loans into your budget can be challenging when dealing with many things. The good news is that technology simplifies budgeting by letting you track all your financial accounts.
A budget app is a technological tool designed to assist individuals in monitoring income, expenses, and savings goals. Some applications have features that can help you repay debts, like student loans and credit card balances.
Budget apps are usually accessible on smartphones, tablets, or computers. Similar to any other digital tool, you must be wise in using it to maximize its benefits. Consider these tips to get started:
Select a user-friendly budgeting app
Budgeting apps differ in quality and features, so not all can help with your financial goals. Do thorough research before downloading one. Doing so can help you avoid wasting time and money on an app with features you won’t use.
Identify your priorities when deciding on which budgeting app to use. You’d want to select something with a user-friendly interface that is compatible with the devices you’re using. See to it that the app offers privacy and security protection, such as multi-factor authentication and biometrics.
Determine what you owe
Determining what loans you have and the corresponding payment amounts and due dates is another crucial step when using a budgeting app. Ensure each account and balance are accurate and current.
Some apps may come with features that let you connect your account to another financial tool and view your credit standing. While it can be overwhelming to see your balances, knowing what and how much you owe can help you create a realistic repayment plan.
Figure out your budget
Consider a budget as a plan for how you use your money. When figuring out your budget for student loan repayment, calculate your monthly income sources and expenses. Your income and expenses might differ since the pause in student loan payments.
Suppose you make consistent payments on your student loans during the three-year hiatus. You may not need to change your budget. Otherwise, you’ll need to find areas for spending cuts to incorporate student loan repayment into your budget or allocate more cash toward paying down your debts.
Use debt repayment strategies
Deciding on what debt repayment strategy you want to use is also beneficial. Some apps come with an attribute that enables you to create the payoff strategy that makes the most sense for your student loan debt.
The snowball and avalanche methods are the strategies commonly used in debt repayment. With the snowfall method, you prioritize paying off the smallest debt first. Conversely, the avalanche method addresses the debt with the highest interest.
Whichever strategy works best depends on your unique situation and preference. Look for an app that enables you to access the payoff summary timeline and assess the potential impact of your options.
Set up automatic payments
Some budgeting apps let you set up automatic payments on recurring bills and loan payments. In most cases, you can link the app to your checking or credit card accounts, automatically allowing you to repay your loan every month.
They may also come with due date trackers. These features in budgeting apps are excellent ways to prevent missing loan payments and incurring late fees and penalties. Take advantage of them to simplify your financial transactions and protect your credit scores in the long run.
Monitor your debt payoff progress
Like other financial goals, monitoring the progress of your student loan repayment is crucial. One advantage of doing this is that you get a visual representation of your accomplishments.
Your progress can motivate you to pay off your debts and make more informed financial decisions. More importantly, tracking your debt payoff progress can inform you whether you need to adjust your budget and strategy.
Speed Up Your Student Loan Repayment With Smart Budgeting
Student loans can be a substantial source of stress, affecting your financial independence and quality of life. Some people effectively manage their debts using a traditional spreadsheet or even with only pen and paper.
But with budgeting apps, you can be more strategic and speed up your student loan repayment. Since these apps let you set up effective alerts, keeping tabs on your payment due dates and gaining control of your financial future will be much easier.
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