Many graduates today, acquire their degrees alongside high-debt burden from unsettled student loans which can be tens of thousands of pounds. However, with a strategic approach, consistency and commitment, you can pay off your student loans faster, lower your monthly payments or avoid surplus borrowing in the first place. Below are definite ways to avoid a huge student debt profile.
Look for varsities that help you rely less on loans
Besides excellent teaching, research facilities and reputation, one critical factor that you should consider when looking for admission at colleges is the load of student debt encouraged- choosing one that does not overload their students with debts.
One way to do this is to check the statistics. Avoid schools with high default rates, which forces students to take up debts that they can’t afford. However, note that default rates may be an average stat and may not reflect the personalised financial package of individual colleges.
Make a budget
Having worked out your monthly repayment sum, the next step is to create a budget. Make sure to treat it strictly with the same commitment and discipline that you would treat other monthly bills like rent, utilities and insurance.
Pay off the loan upfront
Always pay off your minimum balance and avoid excessive default or late fee penalties. It’s a good thing that student loans don’t count on credit ratings and so don’t impact a person’s capacity to borrow in the future after graduation. However, lenders factor them in when considering a mortgage application.
Reduce your principal
Some of us might be lucky enough to find that we have some money lying around. Rather than put it towards the repayment of your student loan; pay it as part of your initial debt capital and lower the original amount. Make sure you notify your lender of this approach so that they know how to credit the extra payment.
Reduce your rate
If you have a consistent job with a fair income that is considerably higher than your total monthly repayment rate, you can refinance the high-interest student loan into a lower one and help you to pay off your debt more quickly. Be sure to have an understanding of the personal loan market before perusing this option to ensure you get the best possible deal.
Automate your payments
In addition to the peace of mind that comes with knowing that your debt profile dwindles further at the end of every month, some lenders offer extra incentives for people who want to put their repayment plans on automatic deductions from their bank accounts.
Get a job that pays your loans
You can as well look for a job that offers help in cancelling student loans. Many of the professions that have the highest loans like law, medicine and veterinary also provide students with opportunities to pay off their debts by working certain jobs.
Opportunities also exist in other fields and professions as well, like law enforcement, qualified charity organisations, social work and education. Even if it is not strictly a loan forgiveness plan, some employers offer student workers debt repayment as one of the incentives in their employment package.