How to be a Responsible Borrower

Now that you have student loans, you have added responsibilities. You owe money to the government, a bank, a private company, or all three. You've signed a document promising that you will repay the money promptly. Students who repay their loans smartly end up being smart with their money for a lifetime. Follow these tips, and benefit from being a responsible borrower:

• Know what you Owe: It might sound silly at this stage, needing to figure out who you owe. But as you get older, it can be easy to forget where your money goes. Keep track of loans and credit cards. Stay aware of interest rates, due dates and terms. An educated consumer always benefits.
• Keep Good Records: Buy a file cabinet, and keep track of your expenses. Whether it's a payment coupon or a monthly statement, retain every receipt or piece of paper associated with your debts. Setting up a pattern like this begins a healthy habit of monitoring finances. Some statements might help during tax season, or if you need to track spending habits.
• Pay on Time: Always pay your bills on time. Always. Even if it's a minimum payment. Late payments are reported to credit agencies, which will lower your credit scores and affect you for years to come. If you have difficulty meeting deadlines set reminders on calendars or automatic payments through your bank. If you cannot make a payment, call your lender first to see if there are any programs available to you.
• Monitor Your Credit: Smart consumers know who they owe, and how much. They also check their credit score annually to make sure the information on file is accurate. Any incorrect data could hamper efforts to take out an auto or home loan in the future. Monitoring your data ensures you're in control of your finances.
• Borrow Only What You Can Afford: This could be the hardest rule of all to follow. Borrowing more than you can afford results in drastic consequences. By adhering to a budget and working within your financial means, you'll be saving instead of borrowing, and using loans as a financial tool rather than a method of desperation.

Once you know the responsibility of having a student loan, the benefits of a student loan will show you why a student loan is a good idea.