Congratulations! You are going to college!
College is a milestone achievement that is sure to bring you closer to amazing career opportunities as well as enrich your life for years to come. There is just one catch, student loans.
The cost of college has riven in the past few decades to unbelievable numbers. The vast majority of students have to take out student loans in order to go to school.
While you’re in college, you will be so busy that it will be impossible to think about how to pay off student loans! That’s why we have outlined 5 tips to help how to pay off those loans before you have even borrowed the money.
1. Set a Budget
A great habit to start today is to make a weekly and monthly budget! Setting a budget is key to long term financial success, and it is never too early to start.
The first step to creating a budget is to see how you spend money. Try using the everydollar app to track your spending and see where you can make some sacrifices to save a bit of money!
2. Make a Plan to Pay Above the Minimum
If you only pay the minimum on your student loans, it can be years and possibly decades before they are finally paid off.
Your student loans accrue interest. If you just pay the minimum, you will get stuck in a cycle of just paying off the accrued interest instead of making a dent in the principal payment due! That’s why you need to focus on making a payment above the minimum every month.
3. Sign up for Autopay
The third step is a trick that will help you with tip 1 and 2! You are able to set a steady budget and pay more than the minimum if you plan ahead and sign up for autopay.
Making sure that your loan payment automatically withdraws every month is going to help you treat your student loans as part of your regular bills. This will simplify the process for you, making it easier to pay back your student loans.
4. Apply your Future Income Increases Towards Your Student Loans
As time passes, you may start a side hustle or get a raise at your job. If you have an established monthly budget, you can easily put this extra income every month straight towards your student loans!
Don’t let money burn a hole in your pocket. Use it towards being debt-free!
5. Never Miss a Payment
The last tip is crucial, never ever miss a payment! You do not want to default on your loans if at all possible.
Sometimes, emergencies happen and you might not have the money for that month. You may want to borrow some emergency funds from a company that will help you out without a credit check. In a pinch, this is a much better alternative than defaulting on your loans!
Pay off Student Loans in a Flash
We hope these 5 tips help you create a plan to pay off student loans as quickly as possible! Now you can work on your degree with the peace of mind that you are prepared to pay off debt.
Looking for more financial advice? Make sure to check out our blogs!
Incidentally, if you are in the market for Canada loans, consider checking out Smarter.loans. They’re a nice little loan aggregator in Canada. They’ve got excellent service and an easy to use interface. Definitely check them out if you need to shop for a loan north of the border.