1.Only making the minimum payment.
Unless you are having financial difficulties, more than the monthly minimum is necessary in order to pay off your loans. Paying only the minimum or participating in IBR/ICR long term is a sure way of making banks/loan servicers wealthy by paying all those interests.
2. Ignoring interests.
To go back to mistake # 1: it’s important to look at interest rates because refinancing your loans might help to attack your loans more effectively. However, with refinancing, timing and knowing if refinancing is right for you is very important.
3. Not calling your loan servicer.
When making additional payments or when changing repayment plans, it’s always a good thing to call your loan servicer. A few people pay more than the minimum payment but do not call to make sure that those payments are going towards the principal.
4. Not having a written plan to pay off your loans.
Your loan servicers have a plan for you to pay off your loans. But what is your plan to pay off your loans that would benefit you and not them? Have a written plan to pay off your loans. Take control of your finances.
Disclaimer: The post is for informational and educational purposes only. Please consult your financial adviser for appropriate financial advice.
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