Managing The Ripple Effects of Student Loan Repayment
Student loan repayment started again this month, so how will it impact you and the housing market? On this week’s episode we discuss the ripple effects of student loan repayment that will impact all Americans. Check out the full episode and if you have questions about how to get started with Homeowner Prep, be sure to reach out to us or drop your question in the comments.
What You’ll Learn from this Episode:
- How Student Loan Repayment Effects Us All
- How The Credit Crisis May Be Impacted By Student Loan Repayment
- Why You Should Start Making Cut Backs Now
- And much more!
00:00 Guess What? Student Loans Are Due Again…
00:30 Welcome To The Homeowner Prep Podcast
01:07 First It Will Impact Those Who Have Loans
01:53 Credit Card Balances And Student Loan Repayment
02:42 What If You Don’t Have Student Loans?
04:20 Start Making Cut Backs… Right Now!
05:05 Find Ways To Avoid Interest
06:03 Getting Started With Homeowner Prep
06:33 Connect With Us On Social Media
“You can’t control what the market is going to be like for interest rates or home prices, but you can control your income.”Eric Hellon
Full Episode Transcript:
Guess what? Student loans are due again. So on this episode we’re going to talk about how you can manage the ripple effects of student loan repayment.
Welcome to the Homeowner Prep Podcast, where every week we educate and encourage aspiring homeowners to help them buy their first home faster. If you aspire to own a home, you’re in the right place. So enjoy. Do us a favor and leave a review, a rating, and be sure to subscribe. Now, let’s get to this week’s episode.
Hello, and welcome to another episode of The Homeowner Prep Podcast. I’m your host, Eric Hellon, and on today’s episode we’re going to talk about the ripple effects of student loan repayment. This month student loans are now due again. There’s no window of opportunity to put those student loans to the side and take care of your normal living expenses without considering that student loan payment. So whether you have a student loan or not, this repayment process and getting back into the swing of our American society, repaying on student loans will have an impact on you.
The first way it’s going to impact you, of course, is if you have student loans to repay. Make sure that you set up payments that are income driven or take advantage of any program that’s out there that’s going to help you kind of work your way back into making those payments. If you can’t afford to make a full payment right now, there’s no need for you to totally miss out on all your other bills.
In order to pay your student loans, you need to set up a plan. Work with your student loan servicer to find a way and a plan that can help you smoothly work your way back into making those payments. The last thing you want to do is have to file for bankruptcy because now you have student loans due. And yes, bankruptcy could be on the horizon for a lot of folks.
Before student loans were due and before this repayment process started back, our credit card balances were at an all time high in America, meaning that people were spending money, but they were putting it on credit and so they were having high balances, high payments and things of that nature. Now, when you incorporate the effects of having to pay student loans back, you can see how there may be an impact to a lot of people’s budgets.
If budgets are impacted, then we may see some type of default on the credit side and that might lend, some people are saying to a credit card bailout. We don’t know, these are all rumors, but this is really what’s going on in our economy right now and a lot of people are going to be affected by student loan repayment.
Even if you don’t have student loans, you have to consider the fact that your neighbors probably do and when I say that, I mean that we are all connected, like it or not, in not only a global economy, but a local economy. So let’s just say that your neighbor has been struggling to pay the bills. They’ve been putting a lot of stuff on credit. They have an increased car payment because remember, just a couple of years ago, used cars were at an all time high as well and now our national average for a monthly car payment is over $700 a month.
So you have these increased bills, you have increased credit balances, and now we have student loans due. Well, if your neighbor can’t make those payments or they decide to make those other payments instead of making the payments on maybe their mortgage, then you’re going to be affected. Now if credit card crisis comes to pass, then maybe there’s some bailout, there’s some talk about that already, but if there’s issues with your neighbor being able to pay their mortgage, that can actually drive the housing market down and the value of your home, your neighborhood, things of that nature are going to be impacted.
So even if you don’t have student loans, your community could be impacted by the simple fact that people are having to start to repay those loans and can no longer pay the other obligations that they may have. So I want everybody to come into this time, take a look at your personal budget and be prepared for the ripple effects of student loan repayment. Those ripple effects can affect your bottom line in your household, whether you have student loans or not. So be prepared.
One way that you can prepare for the ripple effects of student loan repayment is to start making some cutbacks right now. Don’t eat out as much, don’t spend as much money on clothes and some of the other items that aren’t required for you to live day to day. You want to start making some cutbacks right now in preparation so that way you can start to put more money aside for savings and investments.
If you’re looking to buy a house, this is very important. You need to be making some cutbacks. You need to be trying to bring credit card balances down because ultimately that’s going to help you qualify for the home that you want to buy, but you should be storing up, you should be reserving money for what may happen due to student loan repayment.
Another thing you can do to help your monthly budget is to find ways to not pay interest. If you do have credit card balances, find a credit card that has 0% interest for maybe six months to a year and no money is charged to transfer your balances. That might be a temporary solution to help your budget temporarily as you start to make student loan payments again.
So find ways to not pay interest. Save that money that you can now take and start to make those student loan payments with. You have to be creative. There will be ripple effects. There will be things that happen to our economy because people cannot afford to continue to spend money on credit, continue to have high car payments every month, and now have to be expected to start to make those student loan payments again. I’m not saying they’re not responsible for those payments. What I’m saying is it’s going to be a change, and that change is happening now. So be prepared.
If you need help analyzing your monthly budget, your household budget, to find ways to save money, start investing, and be prepared to buy your first home that’s what we’re here for, reach out to us. You can get started with Homeowner Prep by texting the word START to 619-848-3700 or you can visit us on our website at www.homeownerprep.com/start from there, you can set up an initial consultation, we can sit down with you and truly help you with your budget to be prepared for your student loan repayment.
If you just have a general question or a scenario that you want to run by us, the easiest way to do that is to reach out to us on social media. We’re on all social media platforms and we tend to get the majority of our questions on our Instagram account @HomeownerPrep.
I hope you got some value from today’s episode. I hope you realize that student loan repayment doesn’t just impact those who have student loans, it’s going to impact all of us. So be prepared for the ripple effects of this student loan repayment taking place this month. I look forward to providing you with some more great content on the next episode, and until then, be blessed.
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