Student loans and debts are one of the top problems of millennials today. Due to the increasing expenses and tuitions in schools and universities, debts of college students are also piling up. While these loans may most likely take a long time to pay off, there are small steps you can take to lessen the load.
It might be tempting to lay off on the payments when times get rough but if you are determined to be debt free, it is essential to pay your student loans as early as you can. Because of the interest in loans, it is never a good idea to stretch out the payment. If you pay off a $30,000 student debt with a 4.5% interest for 20 plus years, you will be paying around $15,000 in interest. However, if you pay off the loan in 5 years, you will be saving around $11,000. That’s a lot of money that can be put to good use, for other essential things like transportation or rent.
If you pay off your loans earlier, you will finally get that much needed financial freedom that you’ve been longing for. With the student debts scratched off the list, you can relax and have a more laid back life. You can even enjoy other pleasures like travelling, investing in stocks and more.
Here are some simple tips to help you become debt-free:
Understand Your Loan
Having a good understanding of your student loan, interest and repayment schedules can definitely help you make a better plan to pay it off. Ensure that you study and read all the paperwork and loan terms involved when you applied for the loan, even the fine details. Utilize tools like a repayment calculator to help you learn how much you need to be paying each month so you can pay off the debt in a specific amount of time. You can find this kind of tool online or also from your loan servicer.
Don’t Miss Payments
If you stick to the schedule and plan, you should be able to pay off your debt quicker. But, if you often miss payments, you are not just stretching out the loan; you are also paying extra for the late fees and accrued interests. Consider enrolling in auto-debit, where the payment will be automatically deducted from your bank account each month. Of course, ensure that you have enough funds for this option to avoid accumulation of extra fines.
Seek Help When Needed
If all else fails, there’s no shame in reaching out to people for help. A lot of employers offer assistance and will help you pay off student loans. There are also established programs and public service organizations that can offer this type of help. Make sure to utilize the Internet if you need to do some research. Whether you are looking for a bookkeeper melbourne or a debt counselor, you will find what you need with just a couple of keyboard taps and clicks.