If you've graduated from college within the past few years and are trying to deal with a mountain of student loan debt, the best thing you can do is work with a financial advisor. It's difficult to start your adult life deep in debt, especially when you haven't had time to establish a career. You need sound advice so you don't lose valuable years in which you could be building a strong financial future. Here are some things a financial adviseor can help you with.
Consolidate Your Loans
The tricky thing about student loans is that their repayment is based on what you're likely to earn once your career is underway rather than what you are earning when you take them out. That leaves you in a tough spot if you can't get a job or have to begin your job with low pay. If you took out a combination of loans during your college years, you may be able to lower your monthly payment if you consolidate the loans into one. Plus, if you have fewer payments each month, you will be less likely to miss one and take a hit on your credit score.
A financial advisor can help you calculate the benefit and risk of combining your loans into a new loan that may have a longer repayment period and higher accumulated interest. Things to be considered are your current income, potential for future income, and the amount of your loans. If you are out of work and can't even afford your minimum payments, an advisor can inform you about programs for federal loans that allow you to defer payments for a short while.
Prioritize Your Finances
Another valuable service you get from a financial advisor is the ability to see into your financial future. An advisor can see how your future benefits from prioritizing savings over doubling up on student loan payments. He or she can also help you determine the debts you need to pay off quickly, like credit card bills with higher interest rates. You may hate the thought of a huge student loan debt hanging over your head. Your debt could even be more than a mortgage for a home. But it may not be in your best interest to put a huge chunk of your money toward student loans each month if it will pay off better in the future to use the money elsewhere. A financial advisor may think it is wiser to build a nest egg and start an investment fund so you can get on your feet financially before you begin hacking away at student loan debt with double or triple payments each month.
Avoid Financial Mistakes
The biggest reason to work with a financial advisor at the start of your working career is so you don't make costly mistakes. Losing out on ten years worth of savings could really impact your retirement fund. Although you're young and retirement seems like a long way off, you are never too young to start saving. The sooner you start, the more your savings grow thanks to interest. A large nest egg gives you peace of mind throughout your whole life. You'll have money for emergencies, living expenses if you lose a job, medical expenses, vacations, and eventual retirement. It might be a big mistake to let student loan debt get in your way of building a secure future. Rather than thinking of a financial advisor being for someone that needs help managing a lot of money, think of an adviser as someone who can help you manage a lot of debt and build a strong financial footing for life. Contact a company like Wealth Builder Advisor for more information today.