Student loans and small business loans are two of the most important loans you can take out today. Both types of loan provide you with the capital you need to get your education, which qualifies you to run a business, for which you also will need capital. Having two loans at the same time, however, can be daunting. The average graduate carries about $20,000 of student loan debt, though many have a much heavier load, and that’s in addition to the business loan. That’s why we’ve put together a list of tips for managing both loans, while you make enough money to eventually pay them off completely.
Repackage your loans. As an undergraduate, the rates a bank can give you will likely be much higher than rates you can get once you have graduated. If you can repackage your debt to a lower rate, do it as quickly as possible. Not only will this cut your per-month loan payments, but it will also make your loan less expensive over time. Just make sure to read all of the fine print when you repackage your loan, so you know what you are agreeing to.
Spend as little as possible. Some may find that their combined student and business loans are more expensive than their rent payments each month. As you start your business, cut costs wherever you can, including taking advantage of free marketing venues. Don’t waste time and don’t procrastinate. You might have to go without for a few months or years in order to get all of your financial responsibilities taken care of, but once you’re debt free, you’ll be happy you scrimped and saved during this time. Saving can go a long way when it comes to paying off debt.
Ask for help. You don’t have to ask for help with the loans themselves, just with ensuring that your business is as valuable as possible. If you’re struggling, find someone who can mentor you and help you improve your business so that it starts bringing in the money that you need. This person may even be able to connect you with new customers and business opportunities that will help you grow and make money more quickly.
Look at special repayment programs. There are plenty of alternative repayment programs available right now, especially for student loans. Many extend the payment schedule so you have a lower monthly commitment, over a longer loan period. Others require you to only pay a certain percentage of your monthly income. It’s worth a look to see if one of these programs will be a better option for your current financial situation.
Make automatic payments. Your loan payments should be at the top of your financial priorities, as letting these slide could kill your credit for decades. Many lenders let you set up a payment that takes the loan amount every month—and many may even cut your interest rate if you use these programs. Making automatic payments is a surefire way to make sure you don’t fall behind.