Debt Management

Debt, while it can be intimidating at times, having a good debt management plan can help you budget responsibly to help pay down your balances. Making payments on time can even help you establish and maintain a good credit rating. Below are some debt management tips that may help you manage your debt more effectively.

  • Borrow Only What You Need - Create a budget to determine how much you need to borrow. If you don’t need the maximum eligible amount, request a lower amount.
  • Understand Your Loans and Loan Agreements - Make a list of all your debts. Include who you owe, how much you owe, monthly payment, and due dates. Update this list regularly as the amount of your debt changes.
  • Create a Monthly Payment Schedule - Set alerts to remind you when a bill is coming due. Schedule payment due dates around your budget or your regular income schedule.
  • Pay Your Bills On Time - Missing payments makes it harder to pay off your debts because you’ll have late fees added on to your account. If you miss a payment, do not wait until the next payment is due to send your payment. At that point, it could be reported to a credit bureau. If you miss 2 payments in a row, your interest rate and finance charges may increase as well.
  • Pay at Least the Minimum Payment - If you’re having a tough month, be sure to at least pay the minimum due. We all have months where unexpected expenses come up. Just try to get back on track with next month’s payment.
  • Pay off High-Interest Debt First - The quicker you can pay off your debts with higher interest rates (like credit cards), the more money you can save in the long run. Try to put more money into these payments first while being sure to meet at least the minimum payments for your other debts.
  • What About Accounts in Collections - Don’t sacrifice your good accounts for the ones that are already in the collections process. Continue to make payments to those accounts to keep them in good standing. Pay those past due accounts when you can afford to pay them.
  • Contact Your Loan Servicer - If you fall into one of these categories, call your loan servicer immediately for assistance:
    • Having trouble making monthly payments
    • Graduate from school
    • Withdraw from school
    • Drop below half-time enrollment at school
    • Change your name, address or SSN
    • Transfer to another school

You can do this! Sticking with a good debt management plan can put you on the fast track to financial freedom.