The very thought of paying back your student loans can be intimidating. Getting a student loan might not seem as difficult as the process of paying it back on time. As a college student you may feel yourself engulfed in the debt trap, if an appropriate and timely action is not taken up to pay your student loan.
However, you don’t need to freak out, if you land in such a debt situation!
There is no rocket science involved when it comes to managing your debts even as a student. All you need is systematic planning and a strong determination to make yourself debt free as quickly as possible. The sooner you clear your debts, the more you can focus on your Savings and learn how to start investing.
The biggest benefit of repaying a loan faster is the money that you tend to save, if the loan is paid back earlier. Every loan comes at a certain cost which is in the form of interest that you have to pay on the amount borrowed. So, the faster you make yourself debt free, the more financially free you can become at a young age.
Here, we shall be sharing with you few crucial steps that need to be followed if you wish to get rid of your student loan at a faster pace.
Pay off Student Loans faster: Easy Steps
1. Understanding your Loan is the stepping stone:
The first and the foremost thing is to try to understand all the minute details related to your student loan. You should be aware of how much Principal you are repaying and how much is the interest thereupon. What interest rate the lender is charging from you ? How much is the loan period ? Keep a note of all your debts and their relevant details including any credit card dues and supporting documents as well.
2. Planning the right way:
Any action based on a well-defined plan leads to better results. Plan a good and practical strategy to payback your personal loans. Regardless, of the type of loan you have opted for i.e. Federal loan or a private loan, you should plan out how you are going to pay it back. Federal loans given by the Government and private loans offered by private lenders/institutions may have different set of guidelines and repayment options. So, planning in the right direction can surely guide you to clear your debts while pursuing graduation or immediately after that also.
3. Cut your Costs:
“Save wherever and whenever you can” is the primary key to managing your student debts. Share an apartment, save on rent. Cook food yourself and avoid eating out. Forget about luxuries for some time, focus on what is more important and essential for a living. Keep yourself away from attractive offers that can lead to overspending. Avoid making any money mistakes at this stage. These small but crucial lifestyle changes can help you save money and make you debt free at a quicker pace.
4. Different Repayment Plans:
The financial aid in the form of student loans offered by the Government normally comes with a variety of repayment plans. It is really important for you to make out the difference and select the best repayment plan. While some may offer an option to repay a fixed amount over the years, in others the repayment amount shall be low initially but you may see an increasing trend in the later years. So,choosing the correct repayment option is a crucial component for you.
5. A Side-hustle usually helps:
You are young and energetic, so why not use your talent and skills to help you make a side income while studying. To engage in a side hustle shall naturally help you to add up to your passive income and make money and further increase your savings. A recurring side income shall be instrumental in paying back your student loans faster. A part time work, a legit activity that helps you earn can be a big financial support.
What are you waiting for? The interest meter is running high all the time, so it is anyways beneficial to repay any of your student loans at an early stage. Everybody loves financial freedom and getting that at a young age is an added advantage.
Student loans keep you tied up to your past. It is advisable to attack on your student loans along with your education or just after you finish your college.
To be successful in life, you have to be determined and move ahead. The faster you pay off your loans, the better you can focus on your present as well as your future.
A must read : 10 Financial Planning Tips to follow in your 20s !
Have you paid back your student debts? If yes, it’s really good! If not, what are you thinking, go ahead and build a strong plan for yourself and take the responsibility of paying your dues in a timely manner. Its high time you learn to manage your finances yourself rather than looking towards your parents to help you out.
Do you have any other unique ideas to pay off student loans faster? Do share the same with us to help our readers know about different ways and steps on how to pay off student loans in a fast and easy manner.