You’re not alone: more than half of graduates (57%) finish school with student loans to repay, carrying an average debt load of about $27,7471.
Finding ways to tackle that debt can be one of your first financial priorities after graduation. Here are some strategies to help make that task more manageable.
Know what you owe
Make a list of all the credit you have, from government loans, student lines of credit or money owed to family members. Rank them, high to low, by interest rate charged, how much is owed, and how long you have to repay.
The faster you can repay your loans, the less you will pay in interest charges over time. Use our Online Loan Calculator to crunch the numbers, see the borrowing cost, and try different repayment scenarios over shorter periods of time.
Prioritize higher interest-rate loans
Focus on paying back the loans that charge you the highest interest rates as fast as you can. While you need to make your minimum payments across the board, it can make sense to try to pay off higher-interest loans over a shorter term.
Consolidate multiple loans
If you’re balancing multiple debts, interest rates and payment schedules each month, a TD Debt Consolidation Loan can make managing your debt simpler and more convenient. By consolidating, you can combine all of your existing debt – such as credit cards, lines of credit or loans – into one regular payment. We’ll work with you to help you pay your debt at one interest rate, reduce what you pay, improve your cash flow and get closer to being debt-free sooner.
Try our Debt Consolidation Loan Calculator.
Top-up payments whenever you can
While it might be tempting to splurge with a windfall — getting money as a birthday gift or an unexpected bonus at work — get in the habit of applying at least some of that extra cash to chip away at the principal balance owed on lines of credit or other debt.
Keep living like a student for a while
The frugal ways that got you through school can serve you well in your early career years. Your student-life skills can help you focus on tackling debts as you build work experience. Keep future goals, such as buying a house or car, in context with current realities of paying down debt.
1 Canadian University Survey Consortium Graduating Student Survey 2009