4 smart tips you can use while repaying education loans

Opting for an education ensures you can pursue the education of your dreams and use it to become a successful person in life, without a helping hand from parents, friends or relatives. So, if you have or are thinking of going in for a student loan, don’t second guess your decision, it’s one of the best decisions you’ll ever make in your life.

However, debt is something that must be handled carefully. Your journey out of debt, that is repaying the loan, must be one that’s well thought through and planned to the very last detail. You should begin you repayment process with a strategy in place, or else you might end-up starring down the barrel of financially challenging times.

To ensure your repayment is void of hassles and hiccups, this article will highlight some tips that you can use to handle repayments with ease.

1. Opt for education loans with long repayment tenure.

There are a lot of people who are of the opinion that long tenures invite higher interest amounts and thus aren’t a good idea. Though this might be true, a longer tenure also affords you smaller EMI amounts which will help you repay the loan with ease.

You can always cut short the number of years you have to pay interest by making prepayments and reducing the tenures of the loan as and when you are financially capable of doing so.

2. Get a part-time job.

It’s always a good idea to get a part-time job while studying. The income you earn can either be used to create buffer of savings that will provide you peace of mind and financial security when the repayment to begin.

You can also use this income to service the interest payment on education loans during the moratorium period. You might think that moratorium periods are meant for not worrying about repaying the loan and sure they are, but during this period, the lender will charge your simply interest on the loan amount and add the accumulated interest amount to the principal amount. This means a large amount to pay back when the repayment do commence.

You can avoid this by paying the interest during the moratorium period. What’s more is that some lenders will even provide you some relief in the form of lowered interest rates because you choose to service the interest during the moratorium period.

3. Consider education loans refinance.

Study loan refinance is a simple process wherein you transfer your outstanding loan amount from your currency lender to another lender in exchange for long tenures, lowered interest rates or top-up loan amounts. When you switch to a new lender, the lowered interest rates should help you cover EMIs with added comfort. Moreover, if you opt for extended tenures, you can avail further reduced EMIs.

4. Use bonuses, increments and windfall gains to repay education loans.

Over the tenure of the loan, pay hikes, bonuses & windfall gains are sure to come your way. Using these funds to repay your education loan will help you reduce the tenure of your loan and help you save on the total interest payable.

These 4 tips should help you navigate your journey out of debt with ease. Good luck and study hard!

An personal loan would be the first financial help for your family in your absence.