Earning a college degree comes at a hefty price. Unless you’re coming from a well-off family, you might need to get a student loan to study for college. While earning your college degree would help you achieve better work opportunities and salaries, paying them off can be challenging, especially with the price increase you need to face.
Some people might find paying for student loans dreadful, as they cannot save and invest for their future. Everything that should be in their pockets would go directly to pay for their loans. To help you prepare for your future while still paying off student loans, here are some options you may want to consider:
Consider Instalment Loans
While you might want to pay your student loans ASAP, your income might not be enough to pay them in full, especially if you need to cater to your other essentials, such as rent, food, and transportation. To help minimise monthly expenses dedicated to paying off your student loans, you might want to consider instalment loans.
Getting instalment loans helps by allowing you to start paying your loans right away without putting significant stress on your monthly budget. Of course, that doesn’t mean you don’t have to do anything else. It would help to adjust your regular spending habits while paying for your loans. If you have a bad credit rating that’s keeping you from taking out a regular loan, you can look up bad credit installment loans as an alternative.
Refinance Your Student Loans
Student loan refinancing can help you pay your debt quicker without making extra payments, ideally in less than two to four years, depending on your approval. With your student loan, you’ll pay for your current loan plus its interest rates, making you pay more than you should. As you try to refinance your interest rates, you can allow your 8.5% rate to go down to 4%, allowing yourself to pay for your loans as quickly as possible.
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To speed up your payment process, you may want to refinance your student loans for a shorter payment term. While it might require you to pay a bit extra every month, you can save thousands of bucks as you’ll pay for a shorter amount of time and reduce your interest rates. This’ll allow you to save quickly after finishing off your debt. However, not everyone might be welcome to refinancing as you need to have a good credit score.
Pay Loans Automatically
If you pay your loans beyond their due date, you can expect to hurt your credit score. Apart from hurting your chances of applying for a payday loan in the future, it might also charge you an extra rate for paying your loans late. To avoid further charges and damage to your credit score, you should spend your loans on time.
However, if you have a hectic schedule, making you miss paying for your loans on time, you might consider automated payment options that processes payments for you on your scheduled date. This way, you no longer have to worry about the due dates as your lender would automatically deduct it from your bank account. Moreover, some lenders can even offer a discount for using auto-pay, allowing you to reduce the total loan amount.
The best way to handle your loans and expenses is by preparing your budget accordingly. This will help you allocate your money about which ones you should prioritise and which ones you might want to push back and just purchase when you can. While it can be difficult at first, allowing yourself to adjust to a new lifestyle would help you pay off your loans quicker and save and invest for yourself.
You should begin by listing down all of your essential expenses. This would include your student loan, rent, food, and transportation allowance. Now, see if you could minimise some purchases to save more. Even if it is only a couple of bucks, it’ll still go far if you place them in your savings account. Moreover, if you have enough money to save, you should always keep them and prevent yourself from spending them on anything non-essential.
Get Another Source Of Income
No matter how hard you try to budget your money, if you’re not earning enough, you won't be able to pay off your student loans and save for your future. To allow yourself to achieve financial freedom, you should get another source of income that’ll allow you to earn as much as you can so you can pay off your student loans as quickly as possible. While it might be extra work for you, the benefits it’ll bring to your pockets will be worth it.
There are plenty of ways you can increase your income. One of the safest and guaranteed ways is by applying for part-time work near your home so you wouldn’t have to travel too far, saving your time and energy. Alternatively, you can always try to open a small business wherein you can sell products or services to the people. As you allow your business to grow, you can try to make it your full-time work, giving you freedom of money and time.
Consider Low-Risk Investments
If ever you stumble upon getting extra money on the side, you might want to consider having a low-risk investment that allows you to earn more money without worrying about the risk of losing them. With a low-risk investment, you’ll be putting your money in a safe place wherein it could gather dividends, allowing you to save more money without doing any actual work.
There are plenty of low-risk investments that you could try. You might want to consider investing in royalties, wherein you’ll fund a book or music and get your income with every sale until their copyright ends. Alternatively, you can open a time deposit amount wherein you’ll put your money in the bank and allow it to grow gradually due to the interest rate. While some might say that the interest is quite small, it’s still better than letting your money sit still.
Paying off your student loans can be a headache, especially since they can come at a high price. But with proper knowledge of how you can pay them quicker and more efficiently, you can allow yourself to save and invest in your future at the same time. While it might require some extra work on your end, the benefits it’ll bring to you would be worth it.
About Author: Marianne Scott is an entrepreneur. She’s been in the industry for seven years. She holds seminars and writes blog posts that helps millennials to reach financial freedom. During her free time, she enjoys watching movies and going to the beach.
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