10 Ways to quicken the Student Loan Repayment

Student Loan Repayment: Loans are a financial burden especially when you’re a new earner. The effect of such financial obligations, at the start of the career, can be minimized with strategic planning and disciplined financial practices.

Let’s explore certain ways to help achieve financial freedom or debt unloading from student loan sooner than you’ve thought.

Generate a Student Loan Repayment Plan

It should be a comprehensive repayment scheme where you can outline your monthly budget including all income sources and potential expenditures. This helps with a broader picture of the financial condition and helps identify the wastage. For example, recurring expenses on unnecessary stuff can be cut off to align payment towards the larger goal.

High-interest loans must be prioritized

The higher the interest rate, the higher the wealth drain. By identifying the high-interest loans, you’ll save your future self from losing your savings. For instance, a 15% interest rate on a 5 lac sum for 5 years will drain more money compared to a similar loan with a 10% interest rate. Keep yourself safe from higher-interest loans and pay off the debt more efficiently.

Advance payment settlement

There are opportunities to make advance or additional payments such as windfalls, tax refunds, or bonuses that can help ease the burden. With advance payment, the principal amount reduces as the debt.

Automate the Payments

Automatic payments help you not to miss the due dates. The NACH Mandate or setting up auto payment advance approvals can be effective to automate payment. Few loan service providers may avail rewards for timely payment, even if not you’re safe from the late payment fee.

Loan Refinancing

Refinancing is like an exchange offer with some concessions. By securing a similar loan with lower interest rate from some other provider or another loan account can be a good deal. Take into cognizance the pros and cons of the other loan, it must not outweigh the cons; beware of unsecured and private lenders this way you can lose some borrower protection benefits.

Additional Income Sources

Side hustles are the new normal to generate additional or passive income sources. The Internet is flooded with videos and articles on “different ways to generate additional income”. Your loan account closure is a goal that you’re chasing, for this, you can dedicate a side job. You can even invest a particular amount in stocks or mutual funds, start a youtube video, or write some content as you’re reading.

Frugal Living

Frugal doesn’t mean you must live below the sustenance level. An eco-friendly and sustainable lifestyle can be a solution for you. Avoid wastage and buy economically while using the resources available more efficiently. Cutting down non-essential expenses, and checking on spending habits can help your financial security in the long run.

Pick a Repayment Strategy

There are two strategies to go with, you can either choose the snowball or avalanche method. In snowball, the smallest debt is considered first which gives a psychological boost and cuts the short payments. In the avalanche, the highest interest rates are the first to cut down. You’re wise enough to choose which one to go for, based on your financial preferences.

Check for Employee Benefit Plans

Investigate if your employer offers student loan repayment assistance or support. Few employers are considerate enough to help the employee with some concessions.

Explore Loan discount Programs

In case you work in a Public Sector Company, there are chances you can get some relief. It can be either an interest cut or some discount. Government policies also play some role, hence updating yourself could be a wise decision.

As discussed, paying off the loan is a mandate and seems tough, but a comprehensive strategy can make it work. With these disciplined financial habits, you can achieve the desired financial stage sooner or later. These ways can be implemented to achieve the loan-free life goal and to secure a better financial position.