Now that you are a practicing doctor, you need to avoid common mistakes that doctors tend to make when paying off student loans.
1. Losing track of loans.
Borrowers are sometimes late with a loan payment or even default on a loan because they forget about one of their loans.
Automate your payments so you don’t fall behind on your payments. Some lenders will reduce the loan’s interest rate by 0.25% or 0.50% as an incentive if you opt for autopay.
2. Failing to notify the loan servicer about changes in contact information.
Most communication is now done via email. However, after residency or after moving, make sure to update your loan servicer of any changes to your contact information.
3. Being late with a payment.
A single late payment is all it takes to damage an otherwise very good credit score. The credit score is intended to measure whether a borrower will repay his or her debts on time. Borrowers with lower credit scores are less likely to qualify for a loan and will be charged higher interest rates if the loan application is approved. Late payments can also mean that the borrower will not qualify for cosigner release.
4. Choosing too long of a repayment plan.
Longer repayment terms lead to lower monthly payments, however, longer repayment terms also lead to more interest being paid over the life of the loan.
There are so many loan repayment mistakes but these are the most common ones. If you can avoid these mistakes then you will pay off your loans with ease.
Disclaimer: The post is for informational and educational purposes only.
Please consult your financial adviser for appropriate financial advice.
Caroline Clerisme, DMD