With upskilling becoming the norm, many of us are considering completing additional degrees But due to the increasing inflation in the education sector, pursuing higher education has become quite difficult. Thus, the students have to opt for education loans to pursue their further studies.
The pandemic had a significant impact on the job market last year, making it difficult for students to find suitable employment and return their education loans on time. Thus, the existence of Covid-19 and the increasing cost of education have crippled many people’s ambitions.
Hence, it is essential to make a proper plan to repay the loan as soon as possible. Here are a few tips to help you clear your loan quickly without stressing your bank balance.
- Get a clear idea of the loan amount repayable– The first step in creating a repayment schedule is determining how much you will owe throughout the life of your loan. Other supplementary costs, such as processing fees, taxes, and so on, are added to your loan in addition to the principal amount and the interest payable. It’s a good idea to calculate all of the fees linked with your loan so you don’t have any surprises when you start making payments.
- Choose a longer loan term and prepay if funds are available– A secured education loan has a tenure of 10 years and above. Thus, opting for a loan of longer tenure will reduce the monthly EMI installments. Moratoriums on education loans allow you to avoid paying EMIs until you begin working. Hence, during the moratorium period, allocating some resources towards repaying the interest would benefit you and will reduce the cost of repayment.
- Payments through part-time jobs, family & friends– To supplement your income while studying, you can engage in part-time work or ‘side hustles.’ You can contribute the money you make towards paying off your educational loan each year, lowering your overall interest payments. If you get a little additional money from family for birthdays or festivals, you can use it to pay down your interest as well.
- Live simply and economically – You should examine your necessary expenses, such as food, rent, clothing, and so on, and eliminate anything that isn’t necessary. Separate your wants from your needs and prioritize the latter. Thus, it is critical to ensure that any additional money is applied to your debt. If your lifestyle grows in lockstep with your money, your efforts will be in vain.
- Future earnings- You should never compromise with your education even if it looks expensive. Give it a try, if it is something that you are interested to learn and feel that this could be the means to help you pay back the loan amount while being happy with your work.
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