A student loan is a tag that will hang around your neck until the money is cleared. It will affect your credit score and hinder you from accessing other finances that could change your fortunes. At a personal level, you want to drop the tag of the loan as quickly as possible and start a new financial journey.
The speed of repayment depends on your initiative. Some students have stayed with the loan for decades while others clear the debt in months. Get online class help while in college to create time for entrepreneurship or take up a part-time job. You reduce the loan you receive or can begin paying early.
What steps can you take to help you pay the student loan faster?
1. Make larger repayment installments
Every student has a grace period to begin paying the loan. You also have a minimum installment that you can pay to start clearing the loan. Do not take these luxury options towards paying. Start paying as soon as you graduate without waiting for the grace period to push you to start paying. It will reduce the time it takes to finish paying the loan. Further, it gives you a cushion in case you stay for months without a job. You will still be on the safe side with your repayment.
It is possible to commit to larger repayment installments immediately after college. You are taking on your first job without huge responsibilities like family or assets. Consider repayment as a project that you have to take to free your money. Until you clear the loan, you will think that you have the money yet it is going into repaying the loan.
2. Start paying early
Do not wait until the last minute to start paying the student loan. You can start paying while still in college. Take up a part-time job while still in college. You may also start a business while in college to generate money that you use to repay the loan. Allowances and grants or scholarships can also be used to repay the loan. Use the options at your disposal to begin clearing the loan as early as possible.
Clearing the loan early reduces the amount you pay as interest. It will also shield you from penalties that may arise out of late repayment. While your peers wait until graduation to start repaying, you will be halfway through repayment. At the same time, you will commit your money to repay the loan before the money can be directed to other uses.
3. Commit to first pay the loan
Put all other financial commitments on hold until you clear the loan. You may desire to acquire assets like cars, houses, or go on holiday. Shelf these plans in favor of repaying the loan.
The commitment will require financial reorganization. It could require skipping meals or less shopping. You may also limit your social engagements. Decide to repay the loan first instead of any other financial project you could undertake.
4. Apply for discounts and forgiveness
Students are eligible for discounts and loan forgiveness based on their circumstances. You may also discontinue the disbursement of the loan if you have other sources of income. Some of the conditions for forgiveness include having paid 120 installments while employed by the government or NGO. You require strict approval to benefit from these options. Volunteering and other employment opportunities also qualify you for forgiveness. Look at these options to see whether you qualify.
5. Make lump-sum payments
Do you have a lump sum you can use to repay the loan? You do not have to wait for installments. Clear a huge chunk whenever you have the chance. It eases your installments, enabling you to finish the loan faster.
6. Refinance the loan
Approach a financial institution to take up the loan and restructure your account. It will clear the student loan, leaving you with a more manageable credit facility. You clear the student loan from your portfolio, allowing you to refocus your finances.
Paying off student loans takes off a huge financial burden from any graduate. It allows you to channel your money to other more profitable endeavors. You can get good topics to write about finance and other research works in school. Be innovative with your finances and you can clear the student loan in a flash.
