In the latest news, the U.S. Supreme Court decided against President Biden’s plan to forgive student loans. A three-year pause on loan repayments is about to end, and unfortunately, there are no more extensions due to a law passed by Congress on June 2nd. But what does this mean for your wallet?
No matter where you are in your financial journey, starting from September 1st, interest will start to add up on your loans. And from October, you’ll need to start repaying them. Remember, being good with money doesn’t mean having a lot of it. It means being able to manage your money well, so it doesn’t control you. Here are some tips on how to confidently start repaying your loans.
Normally, loan repayments are spread out over ten years. But, there’s a plan called Income-Driven Repayment (IDR) that lets you repay your loans over twenty-five years. Your monthly payment amount is based on how much money you make and how many people are in your household.
There’s no right or wrong choice. It depends on what works best for you and your financial goals. If you’re just starting out, the IDR plan could be a good option. It could help you save money and start planning for retirement.
However, if you can afford the regular repayment plan, it might be better to pay more now. This can reduce the amount of interest that builds up over time. Keep in mind, any interest that adds up by the end of the year gets added to the amount you owe. So, try to pay off this interest by the end of the year if you can.
Even though the Supreme Court said no to Biden’s plan, there are still options for you. The important thing is to find the repayment plan that works best for you. Being good with money means knowing how to manage your money, so you’re in control, not your money.
