Congratulations! Congratulations! You've made it to college! When applying for a student loan, you have many options. First, check out the article on Regions, Loans to Students: What are they good for? Learn how to leverage your student loan.
Here, I'll show you exactly how to budget your loan disbursements. To help you remember these tips, I've partnered up with Regions Bank.
Take only what you truly need
You may be surprised by the amount of money you receive when you receive your student loans. You may receive more than you actually need in terms of available loans. You should resist the temptation to accept every loan that you receive. You must repay all money you have taken.
"I must repay the money, of course." Remember that you will have to repay it… with interest. To conclude, let me share with you an interesting stat. According to Institute for College Access and Success statistics, borrowers who graduated in 2017 owe a median of $28,650. Imagine being in debt before you've even secured a job.
Remember what I said earlier: only take the things you need. How can you tell what you truly need? Consider how much money you'll need to get by. Student loan payments are usually made by term. If your school is organized by semesters, you may receive payments for each semester. It means you need to borrow enough money to cover several months.
The student loan disbursement must cover all of your expenses including tuition, housing, school supply, food, minimal living costs, cell phone, transport, and any other specific expenses. Add up your total expenses for the entire semester to estimate the amount you'll need. Don't underestimate the costs of transportation or food.
You will have to repay any loans that you obtain. Do not take out more loans than you absolutely need.
Avoid being distracted by large lump-sum payments
You shouldn't let a large amount of money distract you from your school term. Even though it is exciting to receive so much money, you must know the amount you'll have to withdraw in order to pay for your school term. You'll be less excited about the large sum when you understand what is required to cover your term.
If you plan to stay on campus after the semester or take a winter or summer course, the loan amount may be needed to hold you over. You might need the loan money to last you until you finish your semester or take a summer or winter course. It is possible that you will be tempted by the lump-sum payment. You can avoid the temptation if you know that you will need to save this money for a while. The next disbursement will be the last.
Prioritise your priorities
Pay for your tuition, books, housing or other school-related expenses as soon as you receive your loan. Get it done! It's time to get it done. You won't only feel better, but you also won't worry about misusing the money. Priorities should always be your top priority.
After you've paid all the bills or expenses that are due, divide up what is left. Food and groceries, transportation expenses (think of insurance and gasoline), and regular monthly costs such as cell phone bills should be covered by the remaining amount. How long will it take you to pay for these expenses before your next payment? Divide the amount of money you have available for these expenses by the number months that you will need to survive. You can then spend that amount each month to cover all your expenses.
You may not know how much you need to spend monthly on such expenses. Find out how to budget for daily college life in this article! It's important to not deprive oneself, but also to avoid going overboard. This money must last!
Separate the surplus funds in a bank account
If you want to make sure that you do not overspend on your monthly budget (or the funding for your next semester), I suggest putting your extra money in a separate account. You can choose from a variety of low-cost or free bank accounts.
The money in your primary account should only be enough to cover the next month. Any extra money can go into a separate account, either a savings or checking. You don't need to mix money for the next two or three months with money you require now. Some people find this too tempting. Idealy, you'll not even miss the money when it is hidden.
It still takes some work to implement this tip. This is a good tip, but it still requires some effort. Budgeting is still important. Pace yourselves with your primary account. You will be less able to survive when you tap into the "future months" money.
You can make money in any amount.
You may be struggling to make ends meet. You want to spend some extra cash to visit your college city or attend events with your friends. Find ways to earn money instead of borrowing more money from your student loan awards! Earnings can cover some of your entertainment costs, even if they are small. You can work in a bookstore, with an app, as a tutor or freelancer.
There are many opportunities to work on campus. You will usually receive some perks for doing so. Contact your financial office immediately after acceptance to inquire about federally funded work-study.
Scholarships are another option. Scholarships may help with your school costs, which will allow you to borrow less money for student loans. Find out how to get scholarship money by reading this article.
If you're a student, your education is paramount. But an extra source of income can help your experience in college. You can even start saving. You never know how much you will have by the time your graduate.
There's nothing I can recommend more for your future as a graduate than to ensure you are in a good financial position upon graduation. You might have to wait longer for a job. You may earn less than you expected. You could be delayed in your repayment of student loans by unforeseen circumstances. Following the tips provided above will make it easier to manage student loan payments. If you keep the right mindset, you can achieve anything!