In case, you have a student loan on your head – as a permanent resident or an immigrant – you must repay it quickly. This is because the longer you take to pay down your debt, the more interest will be accumulated, and the more you will have to pay in total. And as a student or a newly employed professional, paying off a large sum can be difficult. Thus, keep the following tips in mind and repay your student loan quickly and easily.
Take Up a Freelance Job
If you are still studying but want to start repaying your loan now, this is for you. If you have spare time after your college lectures and study hours, you can consider taking up freelance or part-time job. While it might be tempting to have fun throughout your college life with countless movies to watch and parties to attend, you must also keep your loan in mind. But that doesn’t mean you exert yourself and end up having absolutely no social life. Take up a job only if your schedule and mind permits.
Identify where your interest lies and accordingly, look for openings in your city. If you have hobbies like photography or writing, you can search for similar projects. Or you can stick to the basic work-from-home options like being a tutor or babysitter.
Split Your Salary
If you have managed to secure your first job after graduating, congratulations. It is a big transition from being a student to being a working professional. It’s now time to make your budget so that you can repay your student loan soon. Outline all the necessary expenses you will have throughout the month and separate the amount you will need for your survival. When you have the burden of a loan, every dollar counts. So make sure that you try to cut down on your expense.
You can even divide your salary into three parts using the 50/30/20 rule. The three parts are for your needs, investments and savings respectively. Dividing your income based on this rule will help you allot the right amount for everything, every month.
Save As Much As You Can
It goes without saying that you must save as much as you can in order to pay off your student loan without dreading. One of the easiest ways to fall in debt is to live above your means and not have savings. So keep an eye on your standard of living and don’t end up overspending. Remember the 50/30/20 rule!
You can share a vehicle with your colleague while travelling to and from office or college. Consider cooking and carrying your lunch instead of eating out. Also, compare options of whatever you buy and try to buy cheaper items without compromising on the quality.
Other than these, there are several other ways to save on your daily expenses so that you live a comfortable life while paying your loan installments.
Take Advantage of Discounts
Did you know that there are potential discounts for certain types of loan repayments in Singapore? No? We will tell you about them. There are discounts for repayment, automatic monthly deductions, and loan consolidation. For instance, simply signing up for automatic deductions from your bank can also give you a discount. Ask your loan-providing bank about such discounts. In case, your bank has such options, take the best advantage of them.
Don’t Buy What You Don’t Need
Are you planning to buy a new credit card? Or are you planning to buy a new car on installments? If yes, then wait, and think again. You already have the liability of your student loan. By purchasing a credit card, another loan, or any other item on installment, you will increase your burden. The installments of these things will add up and increase your monthly liability. And if you are hardly able to repay your student loan, buying these things will make it extremely difficult for you to come out of debt. Thus, purchase a credit card, get a loan, or make a major expense only when you need it or when you know you will be able to handle the installments.
Pay Out the Extra
In case, you ever get extra cash from different sources, try to save it and pay off your loan. Paying a bigger installment can reduce your loan’s principal amount, and also the interest levied on it. You can ask your bank about their terms for early repayments. Most student loans allow you to make additional payments without penalties. So whenever you get bonuses, incentives or a cash gift, use it to pay your loans. Although it is very natural to get carried away and use the money for a luxurious life, you must know your priorities.
Never Miss Out An Installment
Remember, never ever miss any loan installment. Missing out on even one installment can increase the amount payable. Not only this but missing an installment will also force you to pay penalties. Penalties and double installments will only add up to your pain. In case, you are unable to clear the entire amount, you will end up being in never-ending debt. Whether you don’t have enough funds or miss out on the due date, these reasons won’t matter when you miss out an installment. It will only increase the amount to be paid to the bank. So, be alert and pay all your installments on time.
There isn’t a one-size-fits-all strategy when it comes to clearing your student loan. But by following these basic tips, you will be able to control the pace of your student loan repayment.
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