Attacking Student Loans During the Grace Period
Should you wait until the grace period is over to start paying on your loan?
A lot of people end up waiting until the end of the grace period. What happens is, on most loans the interest is still being accrued and it’s still be added on to the end of the loan.
There are very few loans, very few, that don’t charge an interest during the grace period. Most are still charging interest, you can check your loan paperwork to see. But either way, if you’re in one of those rare loans that don’t charge interest and you’re making payments, then all of that payment is going to a principle which is a great thing.
If you have a loan that is charging interest during the grace period, by making the payment you’re preventing the balance from going up and up every single month. So I think, just as a rule of thumb, let’s say if we’ve borrowed money let’s start making payments immediately. And I would apply that to anything. You’ve got these furniture stores that do the 14 months no interest, no payments.
If you’ve borrowed money from someone, start making the payments immediately. Go ahead and budget for it. Pretend like there is a monthly required payment even though there isn’t, and that’s going to help you get that debt under control and paid off sooner. The last thing you want to do is wake up to all of a sudden the balance is twice where it started and now you’ve got an insurmountable debt to try and tackle.