It’s much easier than you think to get debt free.
If you’ve finished education and you’re ready to start the next phase in your life there may well be one thing that feels like it’s really holding you back: your student loan. Student debts can feel like a millstone around your neck when you start working life. Although they’ve become necessary for many people, the five figure debt that you have to pay off can be intimidating. The problem can be that when you’ve got so much debt it’s easier to accrue more because it’s more difficult to borrow at a good interest rate and you might resort to doorstep loans or loans for people with bad credit. However, getting debt free and moving on is not impossible, as there are plenty of ways to pay off your student loan.
Don’t ignore it
The ostrich approach doesn’t work with student debt. If you pretend that it doesn’t exist then you’re more likely to get into trouble with repayments and end up taking longer to clear the debt. So, as soon as you finish education look at exactly how much you owe, when you need to start making repayments and how long the debt is going to take to clear.
Make overpayments wherever you can
If you have some spare cash at the end of the month then put it towards loan repayments. If you get a bonus at work, add that to the loan repayment too. It may not seem like much fun to do right now but the more you can overpay on that loan the faster you’ll be able to clear it.
Be prepared to make a few sacrifices
If you want to be debt free as soon as possible then saving cash in other areas of your life is going to be the fastest way to do it. So, when you graduate try to keep your living costs low, from rent payments through to what you spend on food and fun. If you’re not overspending – and you’re managing to cut back on items that don’t really need to cost a fortune – then you’ll be able to pay that loan off more quickly.
Think about refinancing the loan
Depending on the type of loan you have and the interest rates you’re paying, refinancing it could help you to clear the debt faster. This means finding another loan that offers better terms, such as a lower rate of interest or no fees. If you cut the cost of the loan then you’ll also be able to pay it off faster. Refinancing a loan may also enable you to make larger monthly payments to reduce that debt at speed.
Look at extra ways to earn income
From walking the neighbour’s dog to driving a taxi or taking on some shifts in a local shop or bar, there are lots of ways to earn a little bit of extra income that you could put towards paying off student debt. If you’re working full time then avoid exhausting yourself and earn your extra cash in short shifts. Even a small additional amount put towards the loan each week or month will help to get you out of debt more quickly.