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Getting quality education anywhere in the world is now a capital intensive project. Many students at different levels resort to getting educational loans to finance their way through college or the university.
Maybe you are on this page because you have borrowed money to pay tuition and other make other expenses necessary necessary for school. Are you wondering how best to pay off your students loan?
One hard truth you must come to terms with is the fact that there are no short cuts or magic bullets. That not withstanding, the good news is that there are several things you can do to make paying back your education loans a lot easier.
Below are some of the tips to help.
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Practical Tips On How to Pay Off Your Student Loans
Many students who have borrowed to finance their educational pursuit ask the question, “How can I pay off my student loans?” And they are seeking answers all over the web space. On this page, we have researched models and practical tips on how to pay off students loans fast be it for Students in Africa, America, Canada, Australia, the UK or any other part of the world.
1. Realize that you are not Alone.
Truly the speaking, realizing that you are not the only one owing students debt is a big step to having peace of mind as you take other steps to offset your debt. According to a recent statistics, student loan debt reached an all-time high of $1.6 trillion in 2022. The implication of this is that there millions of other students in your shoes.
In addition to the above, you must realize that paying off your students loans may not be an easy ride. Many go through school and graduate still having a huge part of their loan unpaid. So avoid becoming worried. Don’t get depressed over this matter.
If you continue reading this article and other related pages on this website, you will learn the necessary basics. Thereafter, you may wish to begin to consider other available options.
Read Also: 15 Ways To Access Finance for Your Studies Abroad
2. Know How Much you Owe.
This is the next big step to repaying your students loan. You must figure out the total amount you owe in all your loans. Then note the exact student loan services you owe and how much you owe each of them. Separate which loans are federal from the state loans. And then note the minimum monthly repayment and the interest rate for each loan.
3. Find Out the Student Loan Repayment Options Available for you.
This is very important. All loans are not the same and as such, are not repaid the same way. How you repay your loans depends on the type of loans you owe, how much you can afford to pay, and your personal money goals.
People’s personal orientation and financial goals differ. There are those who don’t like the idea of owing debts. So they can do everything possible to offset their debts in the shortest possible period of time. Such people opt for repayment plans that allow them to pay off their debts as quickly as possible.
There are others who may opt for longer repayment plans in order to enjoy more flexibility in their monthly budget.
4. Maximize the Grace Period.
The grace period, with respect to students loan, is a specific length of time after the due date during which payment can be effected without penalty.
Whether or not you will get a grace period (and how long) after taking a private students loan depends on the lender. The grace period for federal students loans usually lasts for about six months after the borrower leaves school.
One way to take advantage of your grace period is to make loan repayments during the grace period or even while you are still in school. You may not be required to do so, but if you can, you should. You may undertake paying enough to cover the amount your loans accrue in interest per month. If you can succeed at this, it would mean less interest will accumulate and get added to your principal balance when you enter repayment.
5. Pay your Loans Via Automatic Debit.
You can pay your loans automatically by signing up for automatic debit. If you sign up for automatic debit, your students loan servicer will automatically deduct the agreed amount from your account monthly. This helps to ensure that you make your payments consistently and on time as late payments could badly affect your credit score.
More than all these, enrolling for automatic loan deduction could attract for you an interest rate reduction. All you need to do is to contact your loan servicer to see if your loan is eligible for interest rate reduction. Ask for the terms and sign up for automatic debit.
6. Try to Consistently Pay Extra Monthly.
If you can pay a little higher than the specified minimum amount per month, you will significantly reduce the total amount repayable. While this may not be easy, it is always worth it.
You will pay off your loans faster if you continue to pay little extra each month. If possible, let the additional payment amount be allocated to your higher interest loans first. That can help to free up money for you in the long run.
You need to take out some time to work a plan that is both feasible and suitable for you.
If, for instance, you take a student loan of $12,500 at 3.4% interest rate and a 5-year payback period, the loan would cost would cost $144 a month.
You can decide on a little, convenient extra to add to $144 to reduce the payback period. Assuming you can afford to spend $700 per month instead of $144, you would be able to close your debt in just three years!
7. Get a Side Hustle to Increase Your Income.
This point follows naturally from the last point I made above. If you must add a little more to the minimum payment in order to reduce the accrued interest and repayment period, then you must earn a little more.
To make this possible, you need to pick up a part-time job on the nights or weekends to make money more quickly. When you make this money, you can add the extra cash to your loan repayment. And if possible, work hard enough to send payments more frequently than once in a month – for example, every two weeks.
Don’t give the lazy man’s excuse, “I don’t have time for another job.” If you have time to chat on social media, play video games, hang out with friends or watch Netflix, you have time to make a few extra money. So get down on it.
Remember, be consistent with your side hustle but don’t work too hard. Try to still find time to do your homework and other very important things with respect to your academics.
8. Know the Truth About Students Loan Forgiveness.
There are a lot of scanty information about student loan forgiveness out there. Many platforms do not serve the entire truth. They tell you that it’s okay to take students loan because you could apply for loan forgiveness later and be free from your debts. This, like I said already, is a half-truth.
There are a number of situations in which you can have your federal student loan balance forgiven. There are loan forgiveness and repayment programs for teachers, public servants, members of the United States Armed Forces, and more. But there are many terms, conditions and eligibility requirements you have to meet in order to be eligible (like working in a public service job for 10 years). And even then, forgiveness isn’t guaranteed.
READ ALSO: 5 Important Secrets To Winning Undergraduate Scholarships.
9. Don’t Waste Money.
In order to consistently pay off your students loan, you need to set goals. You need a truck load of discipline to work on achieving your goals. The reason why many do not meet up with repaying their loans lack of discipline. They want immediate gratification. They have an insatiable tendency to live for the now.
You must not buy those clothes now. You must not eat in that restaurant or attend that at this period of your life. Though it may look like you are missing a lot, don’t worry. You have a goal. You are heading somewhere.
Go ahead and make necessary financial sacrifices.
Soon, your students loan will be fully repaid and you will become really free.
10. Stay Motivated!
This is not about trying to whip up emotions. I just want you to think about the power and experience living debt-free. You see, there is no need to drag out your student loan payments for the next five, 10 or even 20 years. By then, you should be debt-free. There is so much more you can do with your money when it comes debt-free.
Let that motivate you to pay consistently till you are done.
Obtaining Students loan is something that is almost unavoidable for most students all over the world – no thanks to the current exorbitant cost of quality education today. The conditions and modalities of paying off Student Loans differ in various countries but something is common, the loans are repaid an accrued interest. In any case, you have to work diligently not to allow your loan to exceed the speculated time. As already suggested above, you can get a College Job to help you pay off the loan or you can apply for Scholarships to help you meet the demands.
We hope that our small tips will help you to raise money and to get rid of student loans forever!
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