Note that collections on all federal student loans have been suspended as part of the efforts to ease the economic impact of the coronavirus pandemic. Please visit our Student Loan Hero Coronavirus Information Center for more information.
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There are many ways to set and achieve financial goals, but with so many suggestions to improve your financial life, you might be wondering where to start.
This guide can help you hone in on some important financial goals to try to hit this year. Here is a list of nine goals you might want to consider reaching, depending on your current financial situation…
If you’re getting ready to graduate from school…
If you’re out of school and have student loans…
If you’ve already paid off your student loan debt…
If you’re getting ready to graduate from school…
The end of your university years is in sight, and you’re ready to go out into the real world.
Although you might be preparing to celebrate this milestone, now’s the time to also think about your financial goals and how to prepare for success. Below are a couple of goals you can start working toward before graduation.
You might not know what your income will look like once you land your first job out of college. But you can make conservative estimates and put together a budget while you’re still used to living on a smaller amount of money.
This is especially helpful if you expect to earn a decent salary once you graduate.
By keeping your expenses low, even with your higher income, you can generate more cash flow. From there, you can choose what to do with the extra cash. You can repay your student loans faster, for example.
Student loans usually come with what is called a “grace period” (often six months) between graduation and when the loans are due. Create a plan now and know what actions you need to take to stay on track with payments before the grace period is finished.
The sooner you pick up the habit of sending in that monthly payment, the easier it will be to manage your student loan debt. What you want to try to avoid is getting used to spending your money on other things or getting into more debt.
Start paying off your student loans as soon as possible. Your future self will thank you for not letting growing interest obstruct other financial goals.
If you’re out of school and have student loans…
Your student loan debt is probably a heavy financial burden, and may cost you a significant amount of money due to the interest that grows over time.
Make one of your financial goals to pay off at least one student loan this year. And if that’s not possible, plan on making a serious dent in what you owe by taking on one of these strategies to crush your debt.
Whether it’s the debt snowball or the debt avalanche method, choose a path of repayment when tackling your federal and private student loans.
Depending on which repayment strategy you choose, you’ll aim to either pay off your student loan with the smallest balance or the one with the highest interest rate.
Making payments on time, every month should also be a part of this plan to repay your loans to keep your credit score in good standing.
And remember, your financial goals will likely change as you move from student to graduate and then into the workforce. Each new year brings an opportunity to succeed in defining your financial goals and executing them.
There are eight repayment plans available for subsidized and unsubsidized federal student loans. Do some research about what works best for you. Then, set a goal to pick a repayment plan that will help you better manage your federal student loan debt.
If that sounds too daunting at the moment, your goal could be to learn about the repayment options available and familiarize yourself with them. That way you can later decide which repayment program is right for you.
If you’re paying the minimum on your student loans, consider sticking to a financial goal of making an extra payment every month this year.
You can also increase your current payment by a set dollar amount or percentage. This can help you pay down your loans faster and save you money on interest in the process. You can estimate how much you’d save using our calculator.
If you’re considering big financial goals, here is a really big one: Pay off every last cent of your student loan debt. A few actions you could take include:
- Cut expenses and put the savings toward your debt.
- Reduce your cost of living by moving to a new location, taking on roommates or embracing a frugal lifestyle for a specific number of months or for a year.
- Earn more money at your job, work a side hustle, or seek a new position with higher pay.
Make sure the extra payments are principal-only payments on your student loans, and if you can only make a one-time extra payment, it’s better than doing nothing.
If you’ve already paid off your student loan debt…
If you’ve already repaid your student loans, congratulations, scratch that goal off your list. Here are a few more goals you can tackle instead.
Whether it’s your 401(k) or an individual retirement account, try increasing your contributions this year and putting in the maximum amount allowed.
Here’s how much you can contribute in 2020, if you’re under the age of 50, according to the IRS:
- 401(k) plans: $19,500
- Traditional and Roth IRAs: $6,000
- SIMPLE IRAs: $13,500
Select your retirement account and divide the maximum contribution allowed by 12. This will show you how much you need to save each month to hit your future money goals.
You might also want to max out your Health Savings Account if you have one. This can be viewed as a retirement account because you can roll over the funds year to year.
If you enter retirement with money in your HSA, you can use those funds tax-free for medical expenses. You only need to contribute $3,550 in 2020 to max out an HSA, according to the Society for Human Resource Management. That breaks down to $295.83 per month.
According to the 2018 Report on the Economic Well-Being of U.S. Households from the Federal Reserve, 4 in 10 adults do not have $400 saved to cover an emergency.
For your 2020 financial goal, build financial security by adding to your emergency fund.
Your first step is deciding how much you want to keep in your emergency savings. One financial suggestion is to have access to $1,000 in savings for an emergency. Another tip is to have three to six months of living expenses stowed away in a high-yield savings account.
Divide this number by 12 to find the amount you need to save each month to reach your new-year goal. Once you have a number, set up automatic transfers to force yourself to save.
According to the U.S. Social Security Administration, the age of full retirement is 67 years, even if many Americans work well beyond that figure, according to AARP. If you’re already on track with your retirement-related financial goals, look at the years between now and the age you plan on retiring.
You’ll likely want to do a lot of big things with your life before you reach retirement. So, in addition to saving in a 401(k), make sure you’re also investing in accounts you can withdraw from before retirement.
Consider opening a brokerage account and contributing to it regularly. Doing so allows you to build wealth you can use throughout your life, not just when you retire.
Maya Dollarhide contributed to this report.
Interested in refinancing student loans?Here are the top 9 lenders of 2021!
|Lender||Variable APR||Eligible Degrees|
|1.88% – 6.15%1||Undergrad & Graduate|
|1.88% – 5.64%2||Undergrad & Graduate|
|2.50% – 6.85%3||Undergrad & Graduate|
|1.89% – 5.90%4||Undergrad & Graduate|
|1.99% – 6.59%5||Undergrad & Graduate|
|1.88% – 5.64%6||Undergrad & Graduate|
|1.90% – 5.25%7||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|2.13% – 5.25%8||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of June 1, 2021.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Interest Rate Disclosure
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.48% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions.
Auto Pay Discount Disclosure
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
Student Loan Refinancing Loan Cost Examples
These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.
One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.
© 2021 Earnest LLC. All rights reserved.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for SoFi.
Fixed rates from 2.49% APR to 6.94% APR (with autopay). Variable rates from 1.99% APR to 6.59% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
6 Important Disclosures for Navient.
7 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.75% Fixed APR with AutoPay.
8 Important Disclosures for PenFed.
Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.