04/23/2015 01:58 pm ET Updated Jun 23, 2015

Prevent Student Loans from Wrecking Your Health

Seven in 10 college graduates in the United States now leave school with student loan debt, averaging about $29,000 per student. With this amount of debt early on in a graduate’s career, the compound stress of paying your loans, starting your first job and moving out on your own can be harmful. For some, the stress may not seem bothersome but for others, better understanding your loans and creating a repayment strategy may help bring piece of mind.

Katrina Walsemann at the University of South Carolina conducted a national study linking stress increase to student loans. “We are speculating that part of the reason that these types of loans are so stressful is the fact that you cannot defer them, they follow you for the rest of your life until you pay them off.” Wisemann also notes that this increased stress is seen highest in middle class Americans who, “do not qualify for governmental assistance, nor is their family able to take on the bulk of the costs associated with college.” In order to help relieve the impact of student loans on your life, here are some ways to stay on top of your loans.

Understanding your student loans

Learning the fine print of your student loans can help lessen the burden and repayment struggle as a borrower. For instance, if you know your loans are fixed rates and not variable, then you can live comfortably knowing that you rates will not rise over your repayment term. Also knowing which type of loans you have can enlighten you on different repayment methods (income-driven, standard repayment) as well as if your loans will accrue interest if put in deferment or forbearance. If you have concerns that you are overpaying on your student loans, see how Credible can help lower your interest rate.

Staying one step ahead

The best way to face student debt and stay healthy is to stay one step ahead of the game. Setting up automatic payments is a great first step, which will also make sure you pay your bills on time and not be penalized for a late payment.  In most cases, lenders will also give an interest rate reduction if you set up automatic payments. Another great way is to prepay on your student loans if you can. Prepaying for student loans is penalty fee and can dramatically reduce your balance since your payment will go directly to principle.

If you want a deeper understanding of your budget, calculating your debt to income ratio can help you understand where your expenses are going each month. Your student loans may not take up as much of your monthly income as you think. This is also the same way lenders evaluate you for loans so staying conscious of these measures are a great way towards a sound financial future.

Avoid future debt

Having student loans is enough of a life stressor; don’t put yourself in a worse position by adding more debt to the picture. If you plan on making a large purchase (such as a car) or going back to school, see what you can do to avoid any more debt which will cause you to fall deeper into a borrowing cycle. Ask your current employer if they provide assistance for future education, which is a common practice in many companies. Also see if your loans are eligible for deferment, so you can put off payments while you are in school. Future debt is not always unavoidable; however making conscious decisions about how you choose to spend and save your money is critical in navigating life with student loans.

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