Paying Off Your Student Loan May Take Less Time Than You Think
At the beginning of your first term at university there is the excitement of new surroundings and new friends, and suddenly your grant check arrives and it is off to the bank to get the party started. However, if you are thinking ahead, consider how you are going to pay off the inevitable student loan once you graduate. Start by using a student loan calculator to see how much money you are likely to owe and then work out how much you can pay off after living expenses.
The first way of helping yourself to pay off a student loan quickly is to make sure you get the right type of loan to start with and do not run up too much debt in the first instance. By planning and spending frugally during your university years you can cut down on the amount you will eventually have to pay back. Things like sharing shopping costs with a friend can cut down on expenditure; two for one offers, BOGOF deals and coupons can save you money from the start.
Taking a part-time job while you are studying will also give you extra money that will cut down on the amount you need to loan at the end of the year. While pulling pints and stacking shelves are some of the ways to make extra cash, there are also lots of chances to make money online by writing, completing surveys or designing.
Once you graduate and join the daily grind there will come a time when you are going to be expected to finally start making contributions. The best option is to clear your debt as quickly as possible. As any financial advisor will tell you, the quicker you clear a debt the more money you will ultimately save in interest charges. Student loans, despite being at a lower interest rate, are no different in this respect.
After graduating, maintain living a frugal, student lifestyle, continue living in cheaper accommodation, share food bills, car rides and utility costs with other people. Keeping to the same expenditure that you had during your student years will mean that your additional income can help get rid of your loan faster, so saving on any compound interest in the long run.
To start with, negotiate a little extra from your first job offer by pointing out that your skills and potential are worth a little more. It is always worth a little bargaining, even where job offers are concerned, and most companies expect this. This extra money can be used towards clearing your debt quicker.
Resist going on a spending spree on your first payday. It’s so easy to think “Well I’ve struggled for three years, now it’s my time.” Before you know it, you have bought a new television, picked up a car and taken out even more loans. Keep to buying the essentials you will need for the world of work and leave the unnecessary purchases for a while.
Save whenever you can. Start a coin jar and you will be surprised how much you can collect by just putting aside your spare change. Collecting coupons, switching off lights and catching the bus are all small ways but over time will genuinely contribute to you speedily clearing the grey cloud of student debt.