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Let’s put tech & business aside for a moment and focus on the topic of student loans – something that all NUS students can relate to. Prolonging a debt payment is not the best idea and can lead to less than desirable outcomes. Regardless of whether you have taken out a student loan or short term loan, paying it off and offloading this financial burden should be your top priority.
Unfortunately, not every student is able to do the same and ends up getting caught up in a vicious cycle of debt. This particular situation troubles many. Being a student, you hinders you from concentrating in your studies. It becomes a nightmare especially when there’s an exam that you have to write within a couple of days.
It doesn’t always have to be scary. If you take a planned and organized approach to paying off your education loan, you will not only feel a sense of relief, but it will allow you to have one less thing to distract you from better concentrating on your studies.
Here are some tips for better financial management. After all, being a student, it is your onus to deal with the loan judiciously.
Tips for better debt management for students
- Organize your loans
First and foremost, take control of your loans. You cannot afford to give up your peace of mind just because of these loans. Organize your loans by taking an account of all the loans that you have availed, regardless of whether it is from a private lender or any other loan service provider.
Calculate the total amount that you owe to each of them, the monthly payment for each loan, and list them according to descending rates of interest. Alternatively, you could also ask for a credit report to find the status of your loans.
Make a note of all the loans that you have availed for admission or funding for your higher education.
- Explore alternative repayment options
Generally, you will be able to enjoy alternative repayment options if you have guaranteed federal loans. Once you have found out how much you finally owe from the list in the previous step, you can opt for a so called “income driven loan repayment plan”. In this repayment plan, you have the provision to “cap” your student loan repayment amounts every month between 10% and 20%. As far as the repayment period is concerned, you can opt for a repayment period that varies from 20 years to 25 years.
Otherwise you can find detailed information from your loan service lender. Experts are of the opinion that instead of opting for taking out other types of loans to repay your existing student loan, using this alternative option is perhaps the best.
In fact, many students have tried to take out payday loans to pay off their education loan, which is not a method that works for all.
- Do you qualify for refinancing?
Having a good credit definitely pays off in the long run. If you have had a good credit history and your credit report reflects the same, you can be a promising candidate for refinancing your student loans.
There are many service providers offering loans that are ready to negotiate with students who are finding it difficult to service their loans.
Under such circumstances, these service providers work out ways to help students in making their repayment process smooth and hassle free. How is it done? They allow you to make the repayment at better terms and consequently alter the terms on the loans that existed when you had taken out the loan initially.
In other words, you get the privilege to enjoy the benefits of the student loan, on better terms. They might even look at reducing the rate of interest or reduce your monthly amount that you are entitled to pay.
As such, if you are hesitant in taking out education loan for funding your studies, you can relax a little knowing there are many ways to make payment for the debt.