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About 70 percent of college students who graduated in 2016 had an average of $37,172 in student loans, according to US New and World Report. And more than half of millennial graduates don’t have a clue as when their student loans will be paid off. If you’re a member of this group, this loan can appear as a black mark on your credit report, making it difficult to afford a home because it’s a drain on your finances. The following strategies show how you can deal with this debt before buying one of our Brandywine Homes.

Know all you can about your loan
It’s understandable that you didn’t want to deal with loan details while you were busy with school. But now that you’re working, the only way you can make informed decisions about your loan is by knowing all you can about it. Find out details like who your loan provider is and their contact details, how much is left, when payment is due, and whether there’s a grace period. This period is the number of months that can pass before the first payment is due. Use this period to come up with an effective payment strategy.

Avoid consolidation
If you have several student loans, it may be convenient to consolidate them into one monthly payment to simplify your life. But that means you won’t be able to pay off the loans with the highest rates first. And you’ll be replacing a federal loan, which generally has preferable terms, with a private one, which profits the lender more than you.

Pay off the loans with the highest rates first
You may be tempted to pay off the loans with the smallest amounts first, just to get them off your plate. In the meantime, interest on the high-rate loans will accrue and cost you more. With student loans, as with any other kind of debt, try to get rid of the ones that leech most of your paycheck. You’ll be saving more money at the expense of convenience.

Increase payment but tell your lender how to apply it
Increasing your payment every once in a while, will pay off your loan sooner. But don’t forget to tell your lenders how that payment should be applied. They may apply it to the loan with the lowest interest rate because that favors them rather than to the loan with the highest rates, which is advantageous to you. Include a note with the extra payment stating that you want the extra money applied to a specific loan. Don’t forget to specify the loan number. Then check next month to ensure that the payment was applied properly.

Pay your loan first
If your employer has any kind of automatic deduction, set it up to pay your student loan first. If not, your bank may be able to set one up for you. It’ll be less painful to have the money leave your account regularly before you get the paycheck than it would be to have to write the check yourself each month.

But don’t forget matching funds
While it’s a good idea to put as much of your discretionary income as possible to paying off loans, don’t do so at the expense of an employer-sponsored retirement plan that grants you matching funds. Otherwise, you’ll be throwing away money. Max out your contributions to such a plan before paying off the loan.

Eliminating your student loan is one way to boost your credit and obtain better financing terms when you buy a home. If you have more questions about financing or want to check out our developments in person, Brandywine Homes is opening six new communities this year offering a combined 265 single-family homes and townhomes. Click here for more information.