So you just made Mom and Dad real proud–you’ve graduated from college and you’re still completely alive. Both nuts still attached? What a champ! Although the keg parties and late night puking into laundry baskets might not end for another few months, you should probably start thinking about your money situation.
Step One: Student Loans
If you took out student loans to pay for those joyous four years, you will soon be approaching a very important time period. You may have been made painfully aware of this by your parents or from countless postcards and solicited junk mail. Student loan interest rates recalculate each July 1st.
And thanks to a huge collapse in the financial market along with the continuing signs of a nationwide economic recession – interest rates are nice and low. Just follow this little formula I came up with:
Massive Financial Sector Layoffs = Massive Personal Financial Savings For Those In Student Debt= Massive Boner.
For starters, there are 2 types of student loans:
A. Variable rate – the rate changes with market factors including the raising and lowering of the fed funds rate. (These can be unpredictable and costly, but hey, if you could predict the market so well you probably wouldn’t have needed the loan to begin with, so shut the hell up)
B. Fixed rate – here the rate is locked in, ideally at a low level thus allowing you to pay less over time. (Less money in the LOAN fund, more in the PARTY fund)
If you fall into the earlier category of variable rate loans, now may be a good time to try and find a sweet little fixed rate loan to hunker down with. Don’t be too hasty to sign your life away though, because if you consolidate a federal loan you’ll lose a lot of borrower privileges – such as the ‘slap on the wrist’ penalties for late payments.
For the most part it sucks being in the variable rate category, however because of all these historic changes in the financial sector, variable rates look like they will be significantly lower than most fixed rates after the July 1st drop. So try and lock those in if you can.
Be sure to read all the terms and conditions and bullshit they try and sneak into the stuff you have to sign. Word of advice – avoid anything that involves ‘cruel and sadistic late fees’. Read more about the fine print on those loans [here] and setting a budget to pay for them [here].