Hi friends! Have you completed your graduation but haven’t crossed the mid-25 line still now? It will be better for you to pay off the student loan quickly. Try to pay off the debt as early as possible so that you can start saving money for the future. Here are some awesome tricks on how you can repay your debt before reaching 30.
Spend every penny after much thinking:
I am sure you are disheartened after reading the sub-topic. You may start thinking that I am a young guy. Why am I overthinking about debt? But this is the reality, my friend. Try to spend your money cautiously for some years. You will get rid of your student loan much before you cross the age of 30.
Apply the snowball method:
Have you ever heard about the snowball debt repayment technique? It is an easy way of debt repayment. Start paying more than the minimum amount of the small debt. But do not forget about the larger debts. Make a minimum payment on the larger debts every month while you are paying extra on the smaller debt amount. After your smallest debt payment is over, you can concentrate on the second smallest debt , and continue till every debt is paid off.
Build an emergency fund:
The headline may have surprised you. Why do we need to save our money instead of paying back the debt quickly? Well, it is okay if you are paying off your debt regularly. But life gives us no guarantee. If you are forced to pay an emergency expense like a medical bill all of a sudden, the emergency fund can save you from the trouble. You should put some money in the emergency fund to use it in a crisis. Try to save about 5-6 months of your living cost. You will earn a regular interest on your savings too.
Try to take advantage of various repayment options:
You can refinance your federal and private student loans.
How to repay the federal student loan:
The US Education department gives some relaxation if we obtain the federal student loan.
Check out the benefits the Education Department is providing to you:
Repay as per the basis of your income:
You won’t be pressurized with repayment burden. The payable amount of the federal student loan will be based on your income. Moreover, if you make regular payments, a part of your outstanding debt may be forgiven.
Apply for debt forbearance:
If you had taken out a federal student loan, the debt forbearance is going to give you much relief. Debt forbearance means the education department will postpone your debt repayment for a time period if you are unable to make required payments at this moment.
How you can refinance your private student loan:
Your creditworthiness may act as an important factor, if you want to refinance your private student loan. The lender will give you a personal loan at a lower interest rate if your creditworthiness is good. Your monthly payment will be less than what you have paid earlier to your lender. It means you are saving money on interest payments too.
How to take help from debt consolidation method:
You have another option in the form of a debt consolidation loan. Take out a loan at a lower interest rate than your existing debts. If a lender agrees to give you the loan on the interest rate as per your demand, you will be the gainer! Use this loan to repay all your existing unsecured debts. It is also a smart way to get rid of credit card debt if any.
Apply for a part-time job:
It is okay if you are doing a single job. I will suggest if you have time, try to do a part-time job also. Take expert guidance on how to earn some extra money. The money will help you to repay your debt quickly.
Make a full-proof home budget:
Young adults usually have a bad tendency. They do not take care of the home budget. If you take a careful look for one month to your expenses, you can see how you have misused more than 30% of your income. So, start calculating your necessary expenses. Make decisions about what expenses you can cut off to save more.
Stop applying for new credit cards:
I know your problem friend! Being a millennial I face it too. Every day you get calls from credit card companies. They try to lure you in different ways to take out a credit card from their company. They regard you as their premier client! Never get tempted with these offers. A new credit card means you may take out a loan again. An unnecessary loan payment burden will befall on you.
Try to get a government job:
You can opt for a government job like teaching or the armed forces’ job. A government job means you will be included in the loan forgiveness scheme. A part of the debt will be paid off by the government on behalf of you.
Opt for auto-payment:
You can sign up for automatic payment policy. The loan companies will deduct the amounts automatically from your bank account on time. The benefit is some loan makers offer discounts on loan payments if you choose the policy.
Divide your payment into two parts:
You may adopt the split-payment policy when you are paying off the debt. It means you have to divide the loan amount into two segments. Make the first payment at the beginning of the month and the second one at the middle of the month. It is far better than making a single monthly payment. You are getting a chance to arrange the money and pay the amount twice a month. Apply the policy to get some breathing space.
Non-profit organizations may help you:
Some non-profit organizations are willing to pay a part of the amount on behalf of you if you turn into a volunteer for them. But be cautious of one thing! Read all the clauses carefully before enrolling yourself in such volunteer programs.
Learn how to invest in stocks:
You can start learning about investment from an early student age. Thus you will get another option of earning some extra to pay off the debt quickly. In the beginning, try to opt for risk-free money investment as the return will be safe. You can learn from the internet how to invest in the stock market.
What not to do:
Read the list of what not to do while you are paying off the debt amount. You must know your limits on how far you can go while repaying your debts.
Do not get lured by fraudsters:
Beware of credit companies who are offering you a loan at an unbelievably low-interest rate. Search the internet or go to various lending agencies. You can guess about the average interest rate. If someone is offering you a loan at an unthinkable low rate, my suggestion is don’t believe them.
Do not cross the line while making a loan payment:
Millennials who are currently in the age group between 22 to 25 should remain aware from bad advice. As you still have not experienced the world in a much better way, you will get some bizarre ideas for sure. Someone will tell you to skip breakfast or eat the cheapest food from the road. These tricks will help you to save money! Do not pay attention to such advice. Remember your health is more important than anything else. If you are paying off as per the agreement, it is enough. You should never do anything out of excitement.
Debt brings stress and tension. It is never good for your physical and mental health. Try to pay off your student debt as early as possible. If you can pay it within 30 years of age, you can live a happy life.