It’s always good to be ready to pay off your student loan. After all, the faster you pay back the loan the cheaper it is to pay it off. Interest rates are one of the most annoying things about student loans, so it is important to be in a position to pay off your loan when it’s time to do so.
If you pay off your loan at a faster rate, you can save yourself a bit of extra money by not being stuck with the extra payments. So whether you have a graduate school of management loan, engineering loan, healthcare studies or something completely different, here are four tips for paying off your student loan fast.
Budget according to your needs
One of the main reasons why people struggle with their student loan repayments is because they do not budget effectively. If you know you have an upcoming payment at a certain time, it’s a good idea to ensure you have the money to cover it. Missing repayments often means extra fees and this could result in you being further out of pocket.
Some ways you can ensure you have the money available is to set up a paper, digital or phone reminder to alert you a few days before you have to make the payment - this way you won’t forget.
The best way to ensure that you have the money available is to write up a budget. To make a budget, simply work out much money you have coming and the days you typically get paid on. Then figure out expenses like rent, loan repayments, phone bills etc.
Once you figure out what you earn and how much you need to spend on monthly necessities, you can then begin to see what you have leftover for fun things. You might have to cut back on certain areas in order to budget for your repayment, but small sacrifices can sometimes be necessary to achieve your loan repayment faster!
Debt consolidation loan
Paying off one loan isn’t too difficult, but paying off multiple debts can be challenging. If you have to pay back your credit card, car loan and student loan at once it can be a lot harder than paying off only your student loan.
Debt consolidation can be the best way to deal with this. Debt consolidation loans are a single loan that you pay off monthly and takes care of all your debts. As opposed to paying off multiple payments at different times throughout the month, you will simply have one payment to make and this is all you’ll need to remember.
The best thing about a debt consolidation loan is that it can reduce your outgoing fees. Debt consolidation loans typically have better interest rates than things like credit cards, and because you will know exactly when to pay this one fee it is less likely you’ll be caught out with late repayment charges on your multiple monthly loans.
Round up your loan repayments
Does your student loan allow you to make larger repayments? If so, do it! For example, if you have to pay $130 a month but have the option to pay $150, this will add up faster than you know and can have a really positive impact in the long term. This repayment method is largely dependent on your personal situation. If you can afford to pay back more each month, it’s a very good idea to get it out of the way as quickly as possible.
Paying back student loans doesn’t have to be so challenging, as with the right budgeting and method at your disposal you can employ tactics that will reduce (and soon pay off!) the debt much faster.