There are two bright spots in the economic chaos surrounding the coronavirus: The relief and opportunities for those of us who carry student loan debt:
Your balance won’t change, but you don’t get charged interest during this time. In addition, the legislation puts a pause on debt collectors. There will be no involuntary collection of student loan debt during this period, including garnishment of wages, tax refunds, and Social Security benefits.
Now for the opportunity, and it’s big: If you can make student loan payments – you’re going to pay down your entire debt load faster. You are not being charged interest until after September 30th. No interest means that all of your payments go towards reducing your principal amount.
Unfortunately, this only applies to federal student loans not private loans. Still, contact your lender and student loan servicer to discuss potential options. You may be able to refinance at a lower interest rate due to the Federal Reserve’s recent move to cut rates.
A Helping Hand
Our team at Wealth Wednesdays and The Breakfast Club are committed to giving you tools and resources to help you get through the unprecedented economic challenges due to COVID-19.
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Using apps like Self in a way that builds positive financial habits can set you up for future financial success.
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Most important, remember, you’re not alone on this journey. To catch-up on our Credit Chronicles episode visit The Breakfast Club You Tube channel.