The burden of a looming student debt is something that a lot of students and graduates would prefer not to have. As such, many of them are seeking options that will help them pay off their student loans at a much faster rate than the standard compulsory repayment process. Those who have the same concerns for their student debts can look into these fast track ways of reducing their obligations.
1. Plan Finances Wisely
Individuals who paid for their studies through a student loan usually start paying off their installments as soon as they start earning an income. Most student loans provide for small or minimal installment amounts that will take decades to clear their debts. Those who are able to budget their pay check effectively can look into increasing their loan payment contributions or add voluntary payments on top of the percentage required for each installment. To do this one has to plan on how to allocate their earnings in such a way that daily living expenses are covered along with extra loan payments.
2. Take advantage of government or school incentives for loan payments
There are some government programs that provide rewards for additional contributions or early payment. It could be in the form of extra credits on loan payments or debt reduction. The Australian government for instance offers a Voluntary Repayment Bonus for students who availed of loans through their HECS-HELP and FEE-HELP schemes. It provides a bonus of 5% for voluntary contributions of at least $500 to be credited back to the account of the graduate.
3. Debt Consolidation
Students or graduates who have multiple loans can combine all their current debts and secure a new loan that will enable them to pay it entirely. The ideal option is to get a loan with a lower interest rate and better terms.
Getting rid of student debts as soon as possible is no easy task and a path that is often taken by only those who are hardworking and determined. Planning one’s budget to fast track their loan payments is an exercise that can benefit you even beyond your student loan concerns. Once your debts are paid, you can allot an extra portion of your income to things that are more worthwhile.