4 simple tips to help you repay your education loan efficiently

1. 4 simple tips to help you repay your education loan efficiently

2. These days, an increasing number of students are relying on education loans to achieve their dreams of studying at top colleges. While this funding is a boon, it can turn out to be a problem later on if not managed well. This is why it is recommended that students plan out their repayment strategy beforehand to ensure they clear their debt sooner. To that effect, here are 4 simple tips that you can keep in mind to pay your education loan efficiently. • Budget your expenses and save money If you are living off your student loan, it is wise to spend frugally during your course. As your education loan is funding your overhead expenses like accommodation costs and travel expenses, it is advisable to use as little money as possible. Make a budget and try saving money wherever you can. For instance, instead of moving into a flat, you should try living in a hostel which will help you save a lot of money. Use a bicycle or car pool instead of buying your own vehicle. This way, you can build your savings and use them in paying off your education loan.

3. Start making early payments Your education loan EMI calculator start once your moratorium period is over. That does not mean that no interest gathers during the moratorium period. The interest amount of your loan keeps accumulating throughout your study period and moratorium and gets added to your EMIs once they begin. So, in order to pay off your debt efficiently, it is recommended that you start paying off the interest part of your loan when you are still in college. Try to earn some cash on the side to pay your interest on your own. You may consider signing up for on-campus jobs such as assisting a professor, working in the library, etc. You could also sign up for an internship program where you will be paid. Collect this money and use it wisely towards paying your student loan interest early on.

4. Use windfalls to repay A windfall is a raise or bonus that people get in their salary. Now, if you perform well in your new job, your boss may offer you a decent bonus or incentive for your work. Avoid splurging the entire amount on unnecessary things. Instead put this bonus aside and use it to pay your loan. Additionally, you can also try to earn extra cash by working overtime. With these extra earnings, you can easily opt for a shorter tenure in your education loan with higher EMIs and end up paying less interest. Remember, your main aim should be to clear your debt first and upscale your lifestyle later.

5. Opt for auto-pay The auto-pay option allows your education loan provider to directly deduct your EMI amount from your bank account every month. With this system of payment, you can avoid defaulting on your loan. Many financial institutions are also known to offer reduced interest rates if the student signs up for the auto-pay option. However, different lenders have different sets of benefits if students opt for auto-pay. So, make sure to know what benefits your lender is ready to offer you if you choose to go for the auto-pay option. Keep these tips in mind to repay your education loan efficiently. Hope this article has been informative and useful to you. All the best!

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