How to Repay a Student Loan
Getting a student loan is now easier than ever. It’s the repayment that requires meticulous planning, discipline, and to some extent, intelligence. That’s why even before you complete your degree; you should figure out how to repay your student loan.
For the majority, the student loan repayment plan starts much before they take the loan. You are likely to go through financial constraints if you leave the planning for the last minute. Also, you must be aware of the bank norms to manage your student loan repayment.
How to Repay a Student Loan? – Things You Should Know
A student loan company offers various options on how to repay a student loan to help students manage their budget. It generally involves three major elements:
Calculations of Education loan repayment :
Calculating the EMI for a student loan is the first step an applicant takes. You must know the nitty-gritty about the interest rates, processing charges and how to repay the student loan fast. It will give you a fair idea about:
- The number of EMIs you have got to pay for the complete repayment
- The EMI amount for repaying the loan amount on time
- The number of months and years it would take to pay off the amount.
You can go to the preferred student loan company’s website and use its EMI calculators to calculate the amount, interest and the number of EMIs for repayment.
Methods of Education loan repayment :
Now that you are aware of the repayment amount, it’s crucial to how to repay the student loan – the method and mode. A lot of students get entangled with high-interest rates and long repayment tenure because they are unaware of payment options. Here's a list of the payment methods:
- Easy-monthly-installment (EMIs):
EMI is a fixed amount decided at the time of taking a loan which students pay every month. EMI is a combined sum of total interest and a portion of the borrowed principal amount. So, higher the EMI, higher the component of principal money and faster you repay.
In addition to the EMIs, some lenders give students the option to pay a lump-sum amount at regular intervals to repay the amount. This allows you to pay off early and reduce the total interest.
- Pre-payment or foreclosure:
Students can opt for pre-payment or foreclosure to eliminate all the unnecessary interest that would add up to the month-by-month payment. It may incur a certain amount of processing fees which is certainly better than paying stretched out interests.
Modes of Education loan repayment:
There are multiple modes of repaying a student loan which includes specific repayment methods for studying overseas. The popular techniques offered by a student loan company are:
- Payment by post-dated cheques
- Payment by cash
- Automated EMI repayment
How To Repay Student Loans Fast? – 7 Crucial Strategies
When you think to apply for a student loan, the first thing that pops in your head is how to repay student loans fast. The best way to pay off your loans is to pay more than the monthly student loan repayment amount. An income-based repayment plan will help you to plan and foresee how fast you can get rid of your loans and how much you can save.
If you are wondering how to repay the entire student loan amount fast, we've got the perfect strategies to help you reach your goal.
- Plan well ahead for the repayment:
You wouldn’t have to stress over how to repay your student loan amount if you plan well. Most students who wish to pursue foreign education, plan their finances 3-4 years before their applications. Similarly, make a 4-5 years payment plan and create targets to save and meet the payment schedules.
- Start with extra payment:
There's no penalty for making an additional payment of your student loan. Pay an extra amount or save to make an additional larger payment. However, whenever you make additional payment, make sure to inform your servicer to apply over payments on the current balance only and to keep the next month’s due date it was planned.
- Refinancing your student loan:
A student refinancing is when the lender pays off the existing loans and gives you a new loan with new terms. It may increase your monthly payment, but would undoubtedly help you to pay the debt faster and save a lot of interest money.
- Enrol for auto-pay deductions:
Signing up for autoplay is another way to reduce your loan's interest. Many lenders offer a specific point interest discount if you enrol for automatic deductions from your bank account. With this discount, you would undoubtedly have some extra money to make some additional payment.
- Get a part-time job:
As an international student, you are fully aware of the additional expenses. Finding a part-time job that fits your schedule would help you make some extra bucks to meet your costs and save some for your student loan repayment. Such an income-based plan would undoubtedly ease up the loan payment process.
- Take help from your employer:
While hiring, many employers agree to pay off the student loan, which would mean reduced salary and other employment terms. However, it would be a great way to write off your debts and save yourself from the unnecessary payment of interests for years.
- Use the “bonus” money:
In case you got a raise, allocate some portion of it to pay your loans. You can break it down like – 50% of the extra amount goes to your loan amount, 30% to your saving, and 10% for your spending. You can get a roommate and share your rent and other expenses – this would help you save some extra bucks.
Why worry about how to repay my student loans fast when you have the perfect tricks to do so? Use these strategies and plan your finances well to quit wondering, "God, please tell me how to repay my student loan without going crazy!"
Managing Your Student Loan Repayment: Conclusion
A student’s loan is a financial burden for all students stressing about how to repay a student loan, but in reality, that's far from the truth. Poorly planned finances lead to unfortunate miseries. Student loans help thousands of students to fulfil their academic dreams and get top-quality education which in return boosts a country’s economy.
As students are the prime benefactors of these services, they must get a detailed understanding of the student loan repayment and the management plan. With all the necessary information in hand, managing finances and educational loans would become much easier.
Learn More about Student Loan Repayment and Income-Based Planning
It’s quite natural to lose your sleep over stressing about how to repay your student loan on time. That's why you must consult a professional on the same. Consult the experts at Hireanerd.net to receive complete guidance about repaying your student loan.
From extensive educational assistance to writing A1 assignments to expert financing advice, these professionals are your ideal support. They can help you calculate your student loan repayment amount and create the perfect income-based plan to make your life easy. You can also enjoy some additional perks:
- FREE access to the sample repository
- Top-notch assistance from 4500+ PhD experts
- Fantastic prices on all educational services
- 24*7 customer service throughout the year
- 100% original and error-free content
- ON-TIME delivery of solutions
- Safe and secured payment gateways
Struggle no more with your loan repayment planning. Contact us now and get the much-needed help from the best.