According to Statistics Canada, Canadians owe a whopping $1.28 trillion in student debt. The average student loan debt for the 2017 graduate was $26,000-at an undergraduate level. While some people may still argue that you can’t put a price on a good education, these statistics suggest otherwise. One thing that we can all agree on is that paying off your student loan debt is never fun.
One of the worst feelings of your life is seeing money hit your bank account, only to remember the fact that you need to slice off a huge chunk of it to pay off your student loan debt. So, are you struggling with your student loan debt and want to pay it off faster? Follow these simple tips to accomplish your goal.
Start Paying Early While Still in School
Many students tend to ignore their student loans until after graduation, but this isn’t a wise move if you want to pay off your loan faster. Try to get a part-time job while you are still in college and dedicate most of your earnings towards paying down your student loan. For instance, if you can afford to be paying off $200 every month while you are still in school, then you will have paid off at least $5,000 by the time you graduate which is a significant effort. Doing so will help you to pay off the principal amount faster and focus on the interest.
Consolidate and Refinance
Refinancing your student and personal loan is among the best moves and smart strategies out there for paying off your debts faster. The primary goal of refinancing is to lower the interest rate which means that more of your payments will go towards paying down your student loan.
When you refinance multiple student loans and maybe a personal loan that you recently took, you will get one consolidation loan with a single monthly payment. Before you consolidate and refinance your loan, make sure that you understand the interest rate on each of your loans and figure out if consolidating the loan will offer you lower rates.
Try to Create a 3-to-5 Year Repayment Plan
A simple three-to-five year repayment plan offers you a sense of scope when you are struggling to repay your student loans. By having an estimated end date; it is much easier to commit to paying off your student or any other personal loan.
For instance, if you are a couple with a combine college debt of $60,000 and you are making $100,000 in combined salaries, you can come up with a three or four-year completion plan. This means that you will be forced to make the necessary adjustments in your day-to-day spending to meet your goal.
Make More than the Minimum Payment
Making the minimum payments on your student debt will only favor the lender since you are forced to pay more interest over time. Sit down and assess your monthly budget carefully to see how much additional you can move towards your student loan repayment program.
Making more than the minimum payment will help you to avoid additional interest that may accrue over time. It doesn’t matter whether you have to cut on the number times you eat out every week or negotiate a pay rise, just make sure that you are paying more than the minimum amount of money.