Investing 101: Building Wealth for a Future After Student Loans

We share key considerations for building wealth for the years ahead while still tackling student loan debt.

There are two schools of thought when it comes to saving for the future when you have debt. Some experts recommend throwing every single dollar possible toward debt repayment to ensure a debt-free life. Others recommend taking smaller steps toward financial freedom, allowing you to stick to your budget to pay off student loans and save for the future. At Alt Lending, we believe that with strategic decisions today you can do both!

Below, we discuss key considerations for building wealth for the years ahead while still tackling student loan debt.

Can I Invest While Paying Off Debt?

One of the most common questions among recent graduates is whether it's possible to invest while still paying off student loans. The short answer is yes, but it requires careful balance, prioritization, and an understanding of exactly how student loan interest works.

Student loans typically accrue interest daily based on the outstanding balance of the loan. This means that the longer it takes to pay off your loans, the more interest you'll end up paying over time.  When you refinance your private student loans, you may be able to secure a lower interest rate that can significantly reduce your student loan payment. If you turn around and allocate the funds you save through refinancing toward both debt repayment and investing, you can start building wealth today without sacrificing progress on your student loans.

Some of the most common ways to invest are:

  • High-yield savings accounts
  • Employer-sponsored 401K
  • IRA
  • Mutual funds

Start Small and What to Do After College

We know that life after college involves more than just managing student loan debt, but securing your future is about setting yourself up today for the long term. Consider creating a budget that accounts for both debt repayment and saving for the future. Look for ways to increase your income, whether through a higher-paying job, freelance work, or side hustles. And most importantly, don't forget to prioritize your mental and physical well-being amidst the financial hustle.

Can You Get a Mortgage With Student Loans?

Another common concern for recent graduates is whether having student loans will impact their ability to qualify for a mortgage. While student loan debt can affect your debt-to-income ratio, making it harder to qualify for a mortgage, it's not impossible to achieve a goal of homeownership while still paying off student loans. There are even certain types of loans for mortgages and mortgage products specifically geared toward lending to those who carry student loan debt.

Refinancing your student loans may potentially lower your monthly payments, which can improve your debt-to-income ratio and strengthen your mortgage application. Additionally, demonstrating responsible debt management through timely payments and reducing your overall debt burden can boost your credit score, further enhancing your chances of mortgage approval.

If you’re burdened by student loan debt, life after college can seem overwhelming, but reducing your monthly payments and freeing up room in your budget can help you allocate more funds toward investing, saving, and achieving your long-term financial goals. If you're ready to take control of your student loan debt and embark on the path to financial freedom, reach out to us today. Our team is here to help you explore refinancing options tailored to your needs and goals.

Contact Alt Lending For Help Refinancing Your Private Student Loan Today

Are you ready to take control of your student loan debt and work towards a brighter financial future? Let us help you choose the path that aligns with your long-term financial goals. Connect with the Alt Lending team at (844) ALT-LEND (258-5363) to get started!

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