In the previous blog, some facts about education loans from NBFCs (non-banking financial companies) were shared in which the benefits and how easy to take this loan were also indicated. Although taking a student loan is an easy task but paying them off can be sometimes a challenging task.
Watching your account getting a big paycheck to end up realizing that you have pay all of that money back alongside high-interest rates is surely not one of the best feelings in the world. Well, you need not worry, here is an informative guide highlighting five ways to repay your student loans faster:
5 Ways to Repay Your Student Loans Faster
- Always Aim To Pay Off More Than The Minimum Payment
This is one of the easiest as well as the simplest way to reduce your debt. All you need to do is add extra money to the payments that you have. Set up the payments beforehand so that anything extra associated with the payment will go straight towards your principal. Even if you can afford a comfortable $25 per month, it is still a good start for your aim to repay student loans faster.
- Refinance The Student Loan
Student loans, which itself is a way of financing your studies, can be further financed which is called refinancing of the your loan. The premium goal of refinancing your loan is to decrease the initial interest rate. When you go through the process, you’ll get a consolidated loan containing one monthly payment. With such options at your hand, the interest rate at which you have to pay the EMI is going to decrease making it easier for you to repay your student loan faster.
- Use The Yearly Job Raises
Post graduation almost all the students who opt for education loans, start working. Many students are paid handsomely not just monthly but also are paid yearly raises as part of the company policy. So students have a great chance to divert their raises in paying off the student loan partly instead of aiming for personal technological upgradation or the first car, etc. Students should make way for at least 50% of your raised money to your loan payments, so that they can shorten the duration and reduce the principal amount as much as possible.
4. Get Hold of Jobs Offering Loan Waiver
Many jobs like the public service ones or teaching jobs may specifically offer you forgiveness for some part or even all of your student loans. The whole thing is quite a bonus for you as what you are getting is free money. You get a job as well as extra money for paying off your student loan payments with ease. Though, this thing comes with a particular shortcoming that you’ll need to put extra efforts for fulfilling the requirements and complete the full term of work as well. Also, even though the payments are going to decrease, the interest rates will go high, and if you fail to match their terms, you’ll be left with higher interest rates.
- Lessen The Monthly Budget
One way of paying more than the minimum amount for loan is to reduce your financial monthly budget and make way for as much possible for paying off the loan EMIs or the principle. This might be the most obvious choice for students but trimming your budget is easier said than done. Though, incapable of reducing the budget and increase in the monthly budget becomes the reason why most students are not able to repay their student loans faster. Try to trim your budget as much you can, and we guarantee you that it’ll definitely work.