Many people graduate from college or university owing a considerable amount of money from student loans. These loans may be the only option for paying tuition and room and board while attending school full-time. But like any other form of credit, these loans must eventually be paid back. There are a number of strategies that can be used to lessen the burden of repaying student loans.
Pay what you can when you can even if a payment is not due. Establish a payment plan that is based on your income and make timely payments to avoid late fees and additional interest. Government student loans offer many repayment options, so pick the one best suited for you and get started as soon as you can to keep the repayment amount as low as possible.
Pay extra when you can to lower the principal balance. With student loans, the extra amount paid may be automatically applied to future interest payments. You should specifically request that the extra amount paid be applied to the principle so future interest accruals will be less.
Pay private loans off first. These likely have the highest interest rate and there are no forgiveness programs for private student loans. Always pay the highest interest loan first to keep interest costs down as much as possible.
Take advantage of ways to reduce interest rates. Some lenders will lower interest rates when paychecks are direct deposited to your bank account. This is because they feel that they are more likely to get repaid when paychecks are direct deposited.
Contact the lender immediately if problems arise. This will make the lender much more willing to work with you on a viable solution that works for you.
Make bi-monthly payments if possible. By making half the payment twice per month the principal is reduced faster which means less of the payments go to interest and the loan is paid sooner with less interest cost.
Without student loans, higher education would simply not be possible for many people. Using your loans wisely and making payments on-time will not only protect your credit score, but will also teach you good money management habits for the future. Still need extra cash while repaying your student loans? Contact Fast Access Finance to apply for a loan or find out more about our personal loan options.