Debt is a reality for most students today. However, it doesn’t have to remain your reality for years to come, as there are lots of ways to get to the point of being debt free that little bit faster.
Budget for the repayments
If your student loan payments aren’t being taken directly from your salary then make sure that they form part of your monthly budget so that you don’t miss them.
Make sure you know exactly how much you owe
You may have a rough figure in your head in terms of how much you borrowed and what you know the interest rate to be. However, the reality of the debt that has been accrued could be rather different. It’s very easy to miscalculate or overlook certain fees or interest rate rises. So, when it comes to paying off your student loan start by establishing exactly how much you actually owe.
Begin making repayments straight away
There may be the option to delay the first repayments but, unless you have a very good reason for doing so, it’s better to start reducing the debt now. The earlier you begin repaying your student loan, the sooner the total will be cleared.
Live below your means
The first few years after graduation may be fairly tight on the finance front but if you’re able to live below your means then you can apply more of this cash to paying off your student loan. Being frugal now will give you a much wider range of choices in the future when you’re debt free.
Overpay as often as you can
Get into the habit of applying any spare cash that you have towards an overpayment on your student loan. If you get into this mindset early on then it won’t become a battle between spending the additional money on luxuries or applying it to reducing your debt.
Be prepared to go without
If you want to create room in your budget to make loan overpayments then you may need to make some initial sacrifices to do so. Expensive mobile phone contracts, entertainment systems, going out with friends, travel and clothes, for example, may not be possible for the first couple of years. However, once you’ve cleared that student debt then everything that you earn is yours to spend, whether you want to buy a home or travel the world.
Consolidate your debts
If you have several different student loans then you might be able to consolidate these into one. This not only makes repayment easier, as you have only one debt to think about, but also gives you the opportunity to reduce how much you pay overall. Look for a consolidated loan with a reputable loan company and with a lower rate of interest than you’re currently paying on most, or preferably all, of your existing loans.
Stick to the plan
Once you’ve made a plan to clear your student debt then stick to it – clearing debt requires ongoing commitment not to take on new debts or re-spend old ones.