How to Repay Student Loan Faster?
After college graduation, you’re surely excited to begin the new chapter of your life where you can now work on your dream job and have the salary you deserve from all of your hard work, but you suddenly remember your student loan.
Certainly, it is great to finally get your diploma and apply for a high paying job however, repaying your student loan as fast as you can is actually one of top priorities you should consider before anything else. There are indeed a lot of reasons why a student loan should be paid off fast like when you are already done paying your student loan, you can now have your salary all by yourself rather than having it divided to all your expenses, bills and student loan repayment.
It could also help with the interest rate especially that loans charge interest per annum hence if you can repay your student loan earlier, you can now save money from the interest rate which is usually from 4.5-5.39% per year in Singapore.
So, how can you pay off your student loan faster? There are many ways on how you can pay your student loan faster such as the following:
● Requirements for loan repayment
Student loans have different requirements and repayment terms depending on the bank or licensed money lender in Singapore where you have applied for the loan thus you have to review your student loan policy thoroughly. Through this, you can check on how much is the loan’s interest rate is per annum so you can budget your salary and see how much you should pay per month to repay your loan faster.
There are also some student loans where if you can pay it before your graduation, you won’t be charged for any interest rate, but if you can’t pay the full amount before your graduation, you may opt just to pay a small lump sum amount towards the balance so that your interest rate will be reduced after your graduation.
● Work out your budget
Were you able to get a job right after graduation? If that’s the case, you can now earn money and save for your student loan repayment. When planning for your monthly budget, you have to make sure that you can come up with a budget and financial plan where you can save some money.
There are many ways on how you can save from your monthly budget such us having priorities and avoid purchasing unimportant things. You can also save from your water and electrical bill. These are just little ways but it can surely help you in repaying the licensed money lender.
● Always keep track
You may be tempted to spend money especially that you just got a job after graduation and you wanted to reward yourself, but before all of that, you have to think through your priorities and make sure that you stay on track.
Staying on track when it comes to your student loan repayment is undoubtedly an excellent way for you to pay it off faster. Student loans have its minimum monthly repayment, and you may think that it’s fine if you pay the licensed moneylender with just the minimum monthly repayment well, if you wanted to have a faster repayment of your student loan, you may choose to repay bigger.
● Make lump sum payments
There are times when you can receive extra money such as a year-end bonus and when you have these kinds of opportunities, it is best that you are going to give it to your moneylender to repay your student loan.
● Clear it all
There are some college graduates that before their graduation, they can save money and they are being torn whether they are going to invest it into a business or they are going to use it to repay their student loan.
It is surely a great idea if we are going to have our savings invested in a business but if we are going to compute the overall interest you are going to pay over the years of your student loan, you can see that you will be paying a lot for the student loan interest especially if you can’t pay it right away.
Therefore, it is best that you will spend the money that you have saved to repay your student loan; this way, you don’t have to worry about the loan’s interest and your earnings with your job will now be spent on your daily needs rather than having a hard time balancing your loan repayments and daily expenses.
Paying a loan is surely not easy, but if we are determined that we are going to reach our goal which is to repay a student loan as early as we could, we can do it and thank ourselves in the future that we can come up with the right decision.
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