Post-college life

Four Tips to Reduce Student Loan Debt Stress

Feeling suffocated by student loan debt? If so, you're not alone. According to CNBC, 30 percent of Americans say financial anxiety is a constant source of stress.


The good news is that you don't have to sacrifice your mental well-being in the name of debt. Instead, take control and learn to feel empowered about your student loans.


If you’re feeling the student loan pinch, these suggestions will help you shift your focus. Soon, you will learn to effectively manage financial stress, once and for all.


Knowledge Is Power


Financial woes contribute to anxiety in a very real way. In fact, the American Psychological Association has said that money is the second-leading cause of stress in the U.S.


When money matters start to get stressful—especially when we have a full plate with work, family, and personal interests—it’s only natural to try to avoid or rationalize complications. We ignore balances, rack up new debt, or convince ourselves that all this anxiety is normal.


But knowledge really is power, so take the time to come face-to-face with your stressors—especially if one of them is student debt. For those who feel overwhelmed by student loan debt, the first step toward taking control is really getting to know your debt, inside and out:

  • How many accounts do you have, and what types of student loans are they? Public loans, which are backed by the federal government, or private loans? Each provides unique borrower protections, so knowing is important.
  • What are the minimum payments and due dates for each? Seeing this information broken down like this will help you build out a realistic monthly budget. Your repayment timeline is also worth your attention. Most loans default to a 10-year payoff plan, but paying them off sooner means paying less in interest over the life of the loan, assuming there are no prepayment penalties.
  • What are the total balances and interest rates? When all is said and done, how much will you shell out in total interest? Your answers should help clarify if refinancing and locking in a loan with a lower rate is a wise move.


Now that you've got a good handle on your student loans, let's talk about what it all means. Seeing all this information in black and white brings into focus the exact nature and extent of your finances—no surprises. Understanding your resources and limitations will also place within reach your ability to fit your minimum payments into your monthly budget.


By formulating a plan, then taking action, you have begun the journey of placing your financial worry in check.


The reward? Stress becomes empowerment.


Gut Check: Debt and Credit Review


Student loans are considered installment loans—they come with a set repayment timeline. Credit cards, by contrast, are considered revolving debt, with payment terms and balances that change depending on how you use them.


To understand the main difference, consider that you can't charge up the balance on a student loan after you receive the funds.


The good news is that credit scoring models are more forgiving of installment loans than they are of revolving debt.


Now that you know the difference, you can manage both types of debt in a way that strengthens your overall credit. This is no small thing—whether you're applying for a mortgage or an auto loan, the most competitive rates and terms go to those with the strongest credit scores.


Here are some tips to give your credit report a boost:

  • Make regular on-time student loan payments. A good payment record on your credit report boosts your credit score because the credit reporting agencies will show you as a good investment.
  • Manage your debt by keeping credit card use in check. Your credit utilization ratio helps determine your credit score, and credit card debt affects the percentage of revolving credit you use.
  • Two takeaways: Maxing out your credit cards drags down your credit score, and well-managed student loans can give your score a boost.

Know your loans and know your credit score. Just having these bits of information proves you’re taking action, which should bring your stress level down.


And remember, if it weren’t for your student loans, you wouldn’t have that education that makes your future look so bright. Some debt is good debt!


Celebrate the Wins


A study by Dominican University of California found that we’re 78 percent more likely to reach our goals when we share progress with a friend. Similarly, the simple act of writing down our goals makes us 42 percent more likely to achieve them.


Take advantage of CommonBond’s suggestions for apps, tools, and resources to help you keep on track with your financial, professional, and personal goals. Mint and You Need a Budget, for example, are excellent tools that help you visualize your progress as you go.

Maintaining a weekly reflection log or journal is another great way to seamlessly monitor your progress. This can be as simple as jotting down your feelings, concerns and accomplishments in a notebook once a week.

Not the journaling type? Plotting the data on a graph or in a spreadsheet and seeing your balances decrease can be equally effective. No matter the approach you choose, the idea is to build some accountability and reflection into your routine.


Every time you cross a debt milestone—whether it’s paying more than the minimum, significantly bringing down a balance, or eliminating a balance altogether—take the time to pat yourself on the back.

Acknowledging your progress stokes motivation and gives you the nudge to keep the momentum going. So reward yourself when you hit a debt milestone—it’s an instant stress killer.




When you refinance, you take out a new private loan to absorb all your outstanding student loan balances. After a successful refinance, you'll have a single, convenient monthly payment to one lender.


But the real reason to refinance is that borrowers can secure better interest rates and repayment terms, which could mean saving thousands of dollars over the long term and possibly reducing your monthly payment.

To qualify for a refinance loan with a competitive interest rate, be ready to provide proof of employment and income. A good credit score is also important.

If you don't meet all of the criteria, all hope isn't lost. A cosigner can make the difference in getting approved. An added perk is that CommonBond will let you release them from the loan after you've made two consecutive years of complete and timely monthly payments.

Wondering if you're a good candidate to refinance? If you're struggling to keep up with your payments or wasting money on high interest rates, it's time to ask yourself if restructuring your student loans can ease the burden.

Make sure the lender you choose has your back. What matters to you most? Whether it's locking in a lower interest rate or reducing your monthly payments (or both), go with a lender who's willing to be a supportive partner in your debt repayment journey.


With interest rates rising, the best time to start saving and reduce yourstress is now. So plug your own numbers into CommonBond’s student loan refinancing calculator to see exactly how much cash you could keep in your pocket by refinancing.


Paying off your student loan debt may feel like an uphill battle, but refinancing can instantly change the game, save you money, and empower you along the way.

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