Do you have a lot of student loan debt and want to pay it off quickly? With the right strategies, you can pay it off faster and achieve financial freedom sooner.
You may also be unsure how quickly you should pay off your student loans. This depends entirely on your financial situation, goals, income and other debts.
After meeting your other obligatory expenses and making your investments each month, you may have some disposable income left. You can use this to pay off student loans quickly by following the strategies listed below:
Making the minimum monthly payment can prevent additional interest, but paying more is allowed. If you have extra money, use it to pay off the student loan principal. This reduces overall interest and speeds up the payoff.
Normally, payments for education loans start 12 months after finishing the course or 6 months after starting work, whichever happens first. During this time, the lender offers a moratorium, which means you don't have to pay back the loan yet. However, if you have extra income during this time, you can use it to pay the interest and finish paying off
Gainful employment post-graduation makes student loan refinancing easier. It reduces interest rates, improves repayment terms, and helps you repay your loan faster.
'Found' money is money that you didn't know you had or forgot about. It can be money in dormant bank accounts, unclaimed investment balances, or unexpected inheritances. Using this money to pay off your student loan principal can reduce your overall interest and repayment time.
Without disposable income, paying off extra amounts towards your student loan may be impossible. To overcome this, create extra income streams through a side hustle or by renting out a property. Use the additional income to pay off your student loan quickly.
To pay off student loans faster, make accelerated payments only if you can afford it. Don't sacrifice your investment plan or other debts. For help with debt repayment planning, consult a financial advisor.
If your student loan is inadequate, or if you are ineligible for student loans for the course you wish to pursue, instant personal loans are a great alternative. Fi Money provides instant loans that arrive directly in your savings account. These are pre-approved personal loans made available to select users with good credit scores.
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It is essential to pay off student loans fast, so you can start saving or investing for your future and accelerate your journey toward financial freedom.
To repay your student loans quickly, you can set up automatic payments, choose a shorter repayment tenure, pay the interest during the moratorium period or make additional payments towards the principal.
If you have low income in the initial years of your career, paying off student loans ahead of schedule may leave you with barely any disposable income for savings, investments and other debts.
To determine how fast you can pay off student loans, it’s best to prepare a budget. If you have some cash left over after you meet your non-discretionary and essential expenses and investments, you can use it to pay off your student loan ahead of schedule.
By paying off your student loan early, you end up paying less overall, leading to more financial freedom over the long run.