Tips On How To Pay Off Your Student Loans Real Fast
If you dream of getting a well compensated job, it is a must for you to enter college and university to be successful in any chosen fields. As you we all know, that undergraduate degree cannot adequately suffice the demand of employment when reaching for higher jobs that requires certain level of education.
Though student dent is termed as one of the good debts, granted that it can potentially increase you income, getting such degrees entails huge costs. As per the Canadian Federation of Students, the average student holds $27,000 of student debt upon graduation. Considering this figure, means a heavy load for an individual to carry especially when you’ve just started off or still seeking for a well compensated job. However, there’s a good strategy on how you can pay down your student debt real faster.
Tips To Pay Off Your Student Loans
Live A Frugal Life After Graduation
Similar to the other people who are striving to attain financial freedom, lifestyle inflation is something that we need to consider. It serves as a wake up call to change your usual standard. Besides, it also triggers you to recreate your social life.
Living in frugality is perceived to be one of the effective approach to become debt free. However, it does not mean that you will deprived yourself and your family with the comfort of living. In fact, there are certain ways on how you can incorporate the same benefit and fun when considering frugality.
Frugal Ways To Consider
- Saving for summer time
- Slashing your bills
- Frugality for a fun winter
- Searching for frugal hobbies
- Saving money at garage sales
- Saving household budget as a stay home parent
- Saving even when dining out
- Ripping your cell phone bill
- trimming your food budget
- Saving on home heating
- Changing transportation habit
- Recreating your lifetsyle
Pay More Than the Minimum
Paying the minimum each month will not get rid of your debt faster. It ca take you longer to be in debt if you do so. This is because each time you are making the minimum payments, you’re not paying your debt principal. Moreover, if you sum it up, it can eve equate to paying double of what you owe due to your interest payments. However, if you pay more than the minimum each month, the extra dollar you pay will go towards your debt principal. By doing so, you can potentially lessen the duration of being in debt.
Moreover, as you struggle to knock down your student loans, you must make sure that you do not consider any other forms of debt. As they say one is enough. If you are at some point, having a hard time toward debt payments, you can look for other means to earn extra income either by freelancing or getting a second job.
Besides, as you focus on paying down your student debt, you must also create a feasible budget. One way to start it off is distinguishing needs vs. wants. Also, you can strategize your shopping and spending disposition.
Make Lump Sum Payments
Another efficient means to knock down your student debt is make lump sum payments. This money can be from your bonuses or incentives, or from your freelance work. The point is each time you gain, make sure you put aside this extra earnings to pay down your student loans.
Choose Floating over Fixed Interest Rates
With the interest charges that shows no implications of increase, it would be sensible to choose floating interest rates over fixed ones. This is because, floating rate student loans are normally 2.5% lower compared to fixed rates. This means,paying less interest can get out of your student debt sooner as you expect.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.