Do you ever wonder how you are ever going to settle your student loan? Or Are you already paying and can’t bear the strain?
You are not alone. Half the population of students in a learning institution receives their certificates coated in a loan they have to serve for a lifetime.
And it’s a headache because it limits your financial abilities. It affects your way of life and your savings. If you don’t manage to pay, your creditworthiness also blows up.
In simple terms, the student loan that once helped you becomes a bug you seriously want to get rid of. So, how do you go about settling it?
Let’s dive right in….
1. Be in the Know
Being in the know means getting the right information regarding your student loan.
The first thing to ask yourself is how much you owe? That’s easy to find out since in most cases, you have the records. However, if you find yourself in doubt, it’s always wise to enquire with your creditors.
You also need to know when the loan is due. This will help you not to miss your first installment. Paying for your installments helps you build financial credibility.
This brings up another question. How much is the minimum amount you should pay per month? Lastly, what is the preferred mode of payment?
All this information helps you plan yourself in readiness to pay for your first installments. The first time in everything is usually the hardest and trickiest. In most cases, the rest just flows, right?
2. Pay up
Now that you already have the information you need, figure out how to pay for your installments. Most people usually get a job shortly after graduation. In most cases, it doesn’t pay handsomely but, it’s still better than nothing. So, how do you manage?
Open a separate account where you deposit part of your earnings. This should be purely intended for your student loan repayment.
Better yet, allow for direct debit so that you do not have to feel the pinch while you pay. With direct debit, money is just drawn from your account at the end of the agreed time, say a month or in two weeks.
If you are still a student, you can seek a part-time job. For example, you could do freelance writing while still schooling. This will help you pay your installments on time.
3. Pay More
Paying more than your usual monthly premiums is just smart but, it is a concept known to few.
Here is how smart comes in… What does your loan cost you?
The principal amount and interest. Right?
And, of course, the amount of interest is dictated by the principal amount. The higher the principal amount, the higher the interest.
Now, the thing is… every time you pay an extra amount, the excess reduces the principal amount.
That means you also lower the interest it attracts. Thus, you save more on your interest. You are also able to settle your student loan within a shorter period.
What do you do if you Don’t Have any Source of Income to pay for Your Students’ Loan Installments?
It is easy to pay for your installments with a source of income, but we cannot ignore the fact that it is not easy for everybody to secure a job. Worse still, you could get fired. Life happens, right?
Balancing schoolwork and side hustles could also prove cumbersome. Some get into accidents and become disabled. Others might want to further their studies, get into military service. It could also be just pure financial struggles. So, here is what you can do…
Apply for Deferment
Deferment allows you to put a pause on your monthly payments when you need a break. The good thing is, loans on deferment do not accrue interest.
Something else…
Forbearance
Forbearance is similar to deferment, only that loans in forbearance continue to accrue interest. That means you pay more than what you would have paid initially.
You are disadvantaged but, that is still a good way to save your skin when you need to buy time.
That might sound unrealistic, but it is possible. Some institutions allow loan forgiveness. In most cases, those people who get employed by the government can apply for loan forgiveness. It usually demands that you stay in service for a specified period of time.
Bottom-line
When it comes to repaying student loans, you need to be well informed. Without proper knowledge of what you are paying for, you are not likely to do a good job. You might end up losing your creditworthiness.
Once you get all the information, layout a repayment plan.
Pay more to lessen your interest and shorten the repayment period. The faster it is, the faster you get your financial freedom back.
If you feel stuck, apply for deferment or forbearance. If possible, get loan forgiveness. It will save you a lot of cash and time.
It is always good to pay for your student loan so that the same can be of help to somebody else. Difficult as it may seem, apply these strategies. I bet it will get as easy as downing a glass of water.