Struggling with juggling your student loans?
Not sure how much you owe, who you owe it to, and how much those interest charges are costing you?
There’s a new free tool available designed specifically to help you manage the debts racked up by getting a college education.
We’ll delve into the details in a second, but first a quick story.
Student Loans are Confusing
I’ve been writing about personal finance for over 5 years now. About six months before I started writing, I used a great work benefit that would pay a certain amount of money toward my Masters in Business Administration. I was new in my career and decided to use loans to cover the tuition that had to be paid upfront, then turn around and get my reimbursement from my employer and apply it to the loans. I also figured if I could use subsidized loans that wouldn’t cost me anything, I could pocket the reimbursement for the length of the two year program, earn a little interest in my high yield online savings account, and then pay off the loans when I graduated before interest accrued.
My plan went perfectly…
…until I realized I hadn’t read the fine print on my loans well enough. It turned out some of my loans weren’t subsidized; they were just deferred. That meant interest had been accruing the entire time, all the while I sat on the cash. (Of course my savings interest rate was well below the interest rate of the loan, so I was definitely losing.)
When I made the discovery I was mortified. Not only was I out a couple hundred dollars, but here I was writing about personal finance on the internet, and I had just made a huge financial mistake.
Maybe you’ve had a similar experience. Maybe you have loans and you know they’re costing you interest, but you don’t know what the rates are. Maybe you’ve got a few subsidized loans and a few private loans and managing the whole mess isn’t easy. I’d also guess you have no idea how long it is going to take you to get the debt off of your back.
My experience with not understanding my own student loans showed me that our financial lives can be difficult to truly understand. One of the most complicated areas in personal finance is student loans because you are signing a bunch of papers and usually have no idea what you’re really signing up for. I thought I had read everything very carefully, but even I slipped up. If someone who is passionate about personal finance can slip up on something like that, what about those who aren’t that interested in personal finance?
That’s where Tuition.io comes in.
What is Tuition.io?
The company has done a great job building a very specific tool to help you manage your student loans in one convenient place. You can see how much you owe, who you owe it to, what interest rate you are paying, and when you will be done paying off the loan. Tuition.io also gives you some ideas about entitlement programs and other loan options that can be used to help you pay down your debt or have it forgiven.
Here is a sample of the dashboard you will see once you create your free account.
Other debt management tools can show you how much the loan will cost you in the long run as well as the impact of paying a little extra each month. But it still isn’t easy to see all of the details about your loans in one spot, nor can you find information on how to further save money with specific student loan programs.
Tuition.io does this and more. Again, this is a free resource for you to use. There’s no sign up costs and no monthly fee. Here are a few of the neat features:
See Impact of Extra Payments
One of the first things on the main dashboard is a big graph showing your current balance and how long it will take to pay off your loans by paying the normal payment each month. There is a handy slider at the bottom that let’s you add extra dollars on to the payment. As you move the slider to add more dollars to your monthly payment, the graph changes to show you how much faster your loan will be paid off. It’s a neat visual way to show you the impact of adding money onto your normal payments.
Show Loans by Balance
There are two main themes when paying off debt: pay off the smallest balance first, then apply the payment you were sending to that debt to your next smallest payment, and so on. This is commonly called the debt snowball method. If this is your preferred method of debt reduction, there is a handy balance tab that tracks every single loan you have on one page so you can see which one is the smallest.
Show Loans by Interest Rate
On the other hand if you prefer to pay off the highest interest rate loan first (which is mathematically the better of the two options), you can also sort by interest rate and tackle that debt first instead.
The reality is as long as you are making extra payments in one way or another, you’ll be out of debt faster. If you are more motivated by knocking out the smallest debt first, great, do that knowing that you’re missing out on being debt free as soon as possible. For many people that trade is worth it because they won’t stay motivated to pay off the highest interest rate loan first. The psychological boost of paying off your smallest debt can motivate you to pay off the next one, which encourages you to continue down the path until all of your loans have been retired.
Showing Other Loan Reduction Options
Another neat feature is Tuition.io will show you ways to consolidate your loans either as a direct consolidation or through a private company. I’m guessing this is where the company generates revenue — if you go through their website to a consolidation company, I bet there is a referral paid to them.
And that’s great as long as you are making progress on paying off your debts.
Being able to see a lot of consolidation options right in front of you increases the odds that you will actually go through with it. Even just consolidating your debt to lower your interest rate can save you thousands of dollars over the course of your student loans. (Alternatively you could consolidate to lower your payments and extend your term in order to save money on your monthly bills today, but this will end up costing you money in the long term.)
I wish I had been able to use a tool like Tuition.io when I had my student loans. Being able to see how much they would end up costing me would have encouraged me to pay off the student loans as soon as I got my reimbursement check.
Don’t make the same mistake as me. If you have student loans, try Tuition.io today — and remember, it’s absolutely free for you to use.
Photo credit: Thomas Hawk