Quick tips to manage student loan payments in times of COVID-19

September 11 2020

Getting started with a new degree surely is a call for celebration, but financial burdens can crash land on these happy occasions as well. For you to maintain a smooth journey, it is important to set a strong base to ensure that times of financial uncertainty do not hamper this growth.

It gets especially tricky when you are in the middle of an economic downturn that not only affects you but also affects your future, employment, and more. The pandemic of COVID-19 has put a lot of new joiners at the edge of their seats waiting to hear about their joining dates.

In addition to that, repaying a student loan also hovers over like a constant reminder that you have financial commitments that you cannot escape. COVID-19 has already caused unemployment in almost every sector of the economy. With consecutive lockdowns and increasing effects of the pandemic, it is difficult to understand exactly how and when things will go back to normal.

So, what should you focus upon first?

Find out if you have a federal student loan or a private student loan. Depending on the type of loan you have chosen, you will know from when you are required to start or resume repaying the loan. Find out what is your grace period and from when will it become vital for you to start paying.

Related Read: Does Student Loan Go On One’s Credit Score?

Tips to manage your student loan payments

You must start paying your loan back eventually, with or without a grace period or moratorium. However dire the situation, missing a payment should be your last option as it can cause serious damage to your credit score. This, in turn, will affect your future plans of availing further loans, financing a vehicle, or any other financial move that will require your credit report. It is always a good practice to perform a regular credit score check to keep a track of your financial standing in the credit market and the expectations you can set while opting for a loan. Let us look at ways to manage your student loan payments:

Do not stop looking for the right job: Even if you have not secured a job and the market situation is dicey, do not stop looking for a job. You never know where you might fit like a missing puzzle piece. Look at reliable job portals and keep your search on, make use of your contacts in the professional and academic world. Also, keep an eye out for unique roles that you might not find on a regular day.

Find other ways: In the process of looking around for the right job, it will not hurt to find some other quick means to earn money from home till you start your new job. This will keep you occupied and get you some seed money for the repayment amount. There are several options for work from home available online today.

Move in with your parents: If you are staying away and spending on your individual utilities, consider moving back home to your parents’ place. This way you will save on rent, food, commute, etc. and be able to plan things better.
Inquire about additional relief options: Once you know how much you can arrange before you must start paying back your loan, inquire if your bank has other relief options for an extraordinary situation like this.

Amidst all this, don’t forget to keep a close eye on your CRIF credit score. An important part of financial management is that you make sure that delay or a change in payment does not affect your credit score, if you have availed any relief options. CRIF is one of the 4 RBI authorized Credit information companies in India providing credit score, credit report and other important financial services to individuals, institutions.