Lower costs will help you to repay more quickly.
Student loans are often a better deal when it comes to borrowing than other types of lending. However, your loan most likely still comes with interest to pay and perhaps even fees too. It may not be in the realms of doorstep cash loans or a bad credit loan when it comes to interest rates but neither are they always as low as they could be One very easy way to ensure that you’re debt free sooner is to find ways to reduce the cost of your student loan. The less you pay for the loan, the easier it will be to pay off. So, how do you do it?
Interest is the biggest cost associated with student loans for most people. The more interest you pay, the more the loan will cost overall. And the more the loan costs overall, the longer it’s going to take to repay. Cutting the cost of a student loan is simple with a refinancing deal, which allows you to use a cheaper loan or other type of debt to pay off the more expensive loan. You’re then left with a student loan with a lower interest rate that will cost you less over the long term.
If there are annual fees associated with your student loan – or other student debts – then it makes a lot of sense to try to switch to a cheaper type of debt for the long term. There are many cheap personal loans – fee free – that you can use to repay a student loan that has fees and costs attached to it or to consolidate expensive debts together into a single cheaper one. Then all you’re left to pay off is the newer, cheaper debt without those additional fees.
Cost: long term repayments
The longer the term over which you make the repayments on your student loan, the more you will pay in interest. So, if you can reduce the time it takes to repay overall then you can cut your costs. The fastest way to do this is to overpay your loan at every opportunity. Double your monthly repayments if you can or look for an employer who will the cost of loan repayments for you so that you can add your own cash on top of that. Consider looking for additional work or living off a very tight budget for a few years so that you can significantly reduce what you owe, as well as what you’re paying for it.
Cost: pretending the loan doesn’t exist
If you’re wishing you didn’t have a student loan now that you’ve graduated then you might be tempted to ignore it. This can be costly in many ways, not least because the debt isn’t going to go anywhere even if you want it to. If you ignore the loan and start missing payments then you could end up with additional fees and penalties to pay. You could potentially damage your credit rating, which will mean that future borrowings cost more, and you’ll end up with even more debt to deal with at some point in the future. If you want to make sure you don’t pay more for the debt that you have then start facing up to it now.