Practical Tips New Grads Can Use to Eliminate Student Debt
For some people, obtaining a student loan is necessary in order to be able to take the course necessary to obtain their diploma. While this is proving to be a viable way to finance your education, repayments can also be quite difficult to make upon graduation. This article lists some tips you can use to eliminate your student debt upon graduation.
Calculate a budget
One of the main things you can do to eliminate your student debt as soon as you graduate is to determine a budget that you can work with. Be sure to consider or prioritize your private student loan in this budget. From there, think about ways to maximize your cash flow by increasing the amount of money coming in, while maintaining the amount of money going out, or even decreasing it.
This can be quite difficult if you have not yet landed a job related to the degree you obtained. In this case, you can consider freelance in the meantime, where you can acquire clients willing to pay you for your skills, time and talent. Use the money you get from freelance work to pay off your student loan debt.
Pay more than the minimum
Another way for you to eliminate your student loan debt upon graduation is to pay more than the minimum amount each month. If you have postgraduate loans, you can then quickly pay the amount you owe if you pay more than the minimum. You can even try to pay earlier as soon as you have the extra funds because more often than not you will not be charged a prepayment fee for this type of loan, although it still depends on the lender.
If your loan is made up of several small loans, you can even consider the snowball method to pay off your student debt faster. It means putting all your efforts into pay the loan with the smallest interest first with more than the minimum payment. As soon as you are done with this loan, allocate the same money that you use for its repayment on the next loan on your list. Repeat the same process until you are free from all your loans.
Think about refinancing
You also have the option of considering refinancing your student loan debt if that makes more sense. For example, you can consolidate all your small loans in one loan with a lower interest rate. This way, not only will the repayments be easier, but you will also save on the interest that you have to pay.
The tips listed above are just a few of the ways you can consider settling your student debt once and for all. There are various other ways you can think of, depending on your current situation. The key is to have the proper focus and discipline in managing your money to make sure you’ll be debt-free in no time.