Having a huge student loan debt can be quite overwhelming especially when you are just out of college and your income is not sufficient. In fact, it can jeopardize your investment plans and affect your future. But if you have a significant student debt, you are not alone and there are many people who are struggling with student loan debts.
While most student loans allow you to pay back the entire amount in ten years, this seems like a long time. Besides, you’ll have to pay a lot of money in interests. The truth is that you can settle this debt in a shorter time and save yourself from the stresses. In this article, you will learn how you can clear your loan in less than 10 years.
Come up with a good budget
While eliminating your entire student loan early does not mean that you will have to do a lifestyle overhaul, you might need to forego some expenses that are not important. Unless you’ve already started living on a budget, this is the best time to start creating one that fits your goals. There are numerous budgeting methods that will suit your situation. For instance, you may want to work with an option that helps you manage an irregular income.
If you can avoid some expenses that only offer short-term satisfaction you can safeguard your future. By design, a student loan will require more money than you had borrowed initially. If you can hold off some things that don’t contribute to your goal, you can end up saving a lot of money in the long haul.
Refinance the student loan
If you are very serious about becoming debt free in less than ten years, you might want to refinance your federal student loan. if you choose to utilize this option, you will be taking a new personal loan with a lender who will pay the money you owe in student loans.
Normally, the new loan comes with better interest rates as well as a repayment period. Actually, if your credit scores are good, you might qualify for lower interests and this implies that you’ll save a lot of money by the time you are clearing the debt.
Refinancing the debt will lower your scheduled payments but if you can work with the original amount, your debt will be gone faster than you know it. Nevertheless, you need to take some time and figure out if this is the best option depending on your circumstances. The moment you refinance the debt, you can’t take advantage of deferment options or even the income-based repayments. As such, it is always prudent to understand how much money and time you’ll save before diving in.
Get additional streams of income
Becoming frugal and sticking to your budget are good strategies but there is a limit to how much you can cut back. For people who want to speed up the process, increasing your income can go a long way in helping you achieve the goals. If you can’t get a pay rise in your current job, you might want to look for a side gig.
Nevertheless, if you want to get a raise its high time you start making significant contributions to your company. You’ll be surprised to realize that about 40% of all employees who speak up and ask for a raise usually get positive results. As such, if you are certain that your contribution is outstanding; you’ll probably get a pay rise.
The fact that most people spend more time on the internet has made remote work easy to get since connectivity is in an all-time high. This means you don’t have to rely on side jobs that require you to report to a physical location. Besides, you can even start earning from your skill set or sell things online. At the same time, you need to keep your eyes open for job positions that pay more than what you are getting in your current position.
Search for grants and other programs that offer assistance
Today, there are assistance funds and grants designed to help you repay the student loan. if you are in the medical or teaching profession, there are programs that can help you pay a part or the entire amount you owe in student loan.
Normally, these programs are run by non-profit organizations as well as the federal government. But it is also good to check if your state of residence offers such options. You may find a program that offers help to people in particular professions and better still, you can qualify for a program designed for state residents.
Check if your employer offers a repayment program
As the employment landscape changes, more and more employers have started offering programs that help their employees handle student loans. This has become a recruitment and retention strategy that is aimed at lowering stress and boosting morale at the workplace.
Before taking up a new job position, you might want to inquire if the employer has a student loan repayment program. If not, you may ask if they have any plans of starting one in the near future. Since most startups consider this as a good way of attracting top talent, finding a good program can be quite easy.
If you’ve been wondering if it’s possible to eliminate your student debts in a short time, know that it’s a practical goal. As long as you are committed to living below your means and prioritize this goal, you will pay back your loan sooner than it is expected. Besides helping you save money, you will have the liberty to enjoy a debt free life.