Some loans, like direct subsidized or direct unsubsidized loans from the Department of Education, don’t require you to start paying back until after you graduate college or leave school. You will even be granted a six month grace period. However, that doesn’t mean you should wait to start paying the money back. Here are some reasons why you may want to begin to pay off your loans immediately.

Less To Worry About

The most obvious reason to start paying back your student loans while still in school is there will be less to worry about when you graduate. Getting that early start can save you money in the long run, especially since less debt means less interest.

This is truly the case if you have taken out an unsubsidized loan. While subsidized loans don’t accrue interest until after you graduate, an unsubsidized loan adds interest to the principle amount immediately. If you defer payments until you’ve left school, you now owe interest on that principle amount plus any accrued interest.

It’s also important to note that many loans will even start to charge interest during the grace period, including most private loans.

Help With Future Budgeting

For many students heading to college, student loans are their first major interaction with finances and it may be the first time they’ve had to create a budget. Paying off your student loans with a part time job or side gigs can ensure that you’re learning that valuable skill.

Taking the time to look at your loans and how best to tackle the prospect of paying them back can help make sure you’re not overwhelmed by later bills, debt, or major expenses. It will definitely be a skill you can use throughout the rest of your life, whether it would be buying a car or paying off a mortgage.

Some Allow You To Pay What You Can Afford

While some loans (usually private loans) absolutely require you to start paying back the principle amount immediately, many agreements will have different terms. Subsidized loans don’t become due until after you graduate or leave school and students can defer payments for unsubsidized loans. This doesn’t mean you should wait!

It also doesn’t mean you should start paying in hundreds of dollars either if you can’t afford it. After figuring out your budget, you’ll know exactly what you can pay. Even if it’s only a small amount or you can’t afford the same amount you paid the previous month, that’s okay. It all adds up. If you have multiple loans, it may also help to focus on one loan at a time, rather than trying to pay them all off together.

The time when your student loans come due can be a scary time for many graduates, but knowing you’ve taken appropriate action to help reduce that debt can help negate that feeling. These are only a few reasons why you shouldn’t wait to start paying back your student loans, private or federal.

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