Having higher education and getting a college degree is a dream for most of the students.
Moreover, every student aspires to complete his or her higher education from a reputed institute or college.
Students know that having a college degree from a reputed institute can greatly enhance their chances of getting a better and high-paying job as Good Career is directly linked to Good Education.
Apart from your dedicated and persistent efforts, enthusiasm, willingness, to learn and acquire knowledge, and intelligence, you have to be financially equipped to meet your college expenses. In case when you do not possess enough funds to finance your college education, you obviously go for taking a student loans.
Though initially, student loans is of great help as it meets your educational expenses, but eventually you have to start repaying it once your education gets completed. Today, the average student loan amount is about $27000 per student in the United States.
Actually Paying off student loans can be a tough task. First of all, there can be a delay in getting a job of your choice. Secondly, usually the starting salaries are also not high that would facilitate easy student loans repayments. Thirdly, if you are not able to regularly make student loans payment, it can last more than a decade which affects your other financial goals and aspirations.
So you ultimately have to take care of your student loans repayment so that you are able to pay off the entire student loans timely as well as quickly too.
Here under we have discussed How to Pay off Student Loans so that you are able to pay your student loan with utmost ease and regularity.
Select the right type of student loans repayment plan
Today, there are various options available so as to make your student loan repayment. Whether you have a federal or a private financer, each one has different types of student loans repayment plans. You can opt for a minimum payment plan each month, or you can go for an income-based repayment plan which considers your monthly income as schedules repayment of the student loan as a reasonable percentage of your monthly income. Whichever plan you adopt you must consider your monthly income, saving plans, the installment amount and the interest paid by you towards your student loan repayment so that you do not face any difficulty in paying off your student loans.
Prepare Your Monthly Budget and Stick To it
Budgeting your monthly expenses is a great tool which can ease your task of student loans repayment. Preparing your monthly budget you can manage your expenses and can set aside the amount you pay as student loans each month. You know what exactly you have and how to allocate your funds in each of the categories so as to manage the monthly expenses. You can prepare your monthly budget manually or can take the help of various online services or can even go for personal financial management software. Then you just have to stick to your budget and follow your budget religiously. Don’t take this as a task but instead enjoy following your budget.
Earn More to Pay More
You should endeavor to increase your monthly earnings. With increased earnings, you can go for increasing your student loan installment amount. Even a $5 increase will help a lot in reducing the overall interest paid by you towards your student loan. It will reduce the period of your student loan, as well. You can do extra-time in your present job, take up some part-time work or can opt for freelancing. Increased earnings will also help you to save for your other financial goals, as well.
Request your employer to pay off your student loans
While you are doing your bit in paying off your student loans, you can also request your employer to help you in paying off your student loan. If you are taking up a job first time, be willing to take the lower salary and commit to stay at the job for a specific time period in exchange for your employer paying in full or part of your student loan. As a veteran employee, you can put this during the annual review and request your employer to pay off your student loans, and in exchange you should commit to continue the services at the same company. This would greatly lower your student loan debt, and you would be left with a smaller amount of student loan to pay.
Opt for Biweekly payments rather than Monthly payments
Usually you go for monthly payments for your student loans, but this may not be the best option for you. Instead of monthly payments you can go for biweekly payments. This saves on your interest paid as well as lowers the overall tenure of your student loan. Let’s see this.
For example, consider a student loans of $40000 at an interest of 4.5% for a period of 20 years. Monthly installment would come to $253.06 with overall payments in the first year $3072.72 and first year interest of $1774.17. In comparison to this, in a biweekly payment mode you make payment of $126.53, totaling 26 payments in a year to pay overall $3372.28 in the first year and interest of $1522.46 in the first year. With Biweekly Payments, you can clear your student loans in just 17 years and 7 months instead of 20 years period required in the monthly payment mode. So you save on the interest as well as lower the time period in paying of your student loans.
Thus, you see that you have to adopt a sound approach to pay off your student loans quickly and that too with ease. The above methods very well illustrate to you How to Pay off Student Loans so that you are able to lead a financially stable and prosperous life.