Higher education may be invaluable when it comes to securing a future, but it also comes at a premium and requires many to take out student loans. In fact, Over £121bn is owed in student debt across the UK as of March 2019. That number is growing at a rapid rate.
Are you looking for ways to pay off your student loans faster? We’ve rounded up a list of methods you can utilize to repay your loans so that you can move on and enjoy your life debt-free.
You might be thinking…what extra cash. There are a few creative ways you can stretch and maximize your income to have extra money to put towards your loans each month. Try practising a “no spend month.” This might sound daunting but really it’s quite simple. Take care of all of your basic needs like rent, food, bills etc. then don’t spend a penny more. No going to coffee shops or out for a drink. Set all of the money aside that you would ordinarily spend on clothing or out on the town and instead pay it towards your loans at the end of the month. While it might not seem like fun at the moment, you’ll be so glad you sacrificed when your loans are paid off.
Automatic Bill Pay
Did you know most student loan services offer incentives if you enrol in auto-pay? Not only will this decrease the stress of having to remember to make payments on time each month, but it could also make you eligible in a slight interest charge decrease. On average, loan services will decrease your interest rate by 0.25. So for instance, if your loan is at 5%, then it would drop to 4.75%. While that might not seem like a massive change, it can make a huge difference in the long run.
Pay Twice Monthly
Try splitting your payments into two for the month. Most companies pay their employees bi-monthly(or twice a month). If you split your payments in two chunks, your bigger payment might feel more manageable. For instance, if you owe £500 in loans each month, then pay £250 at the beginning of the month and £250 at the end of the month. Also, you’ll be secretly tricking yourself into making an extra payment by the end of each calendar year. Making one whole extra payment each year can help you pay off your debt much faster. You’ll also save on interest.
Refinance Your Loans
Last but certainly not least, do you have multiple student loans and/or a high-interest rate? If you have a decent paying job and a good credit score, you may be eligible to refinance. Take a look at Nowloan.co.uk to find the best lender for your unique debt situation. Now Loan compares over 20 different lenders across the web to ensure you find the best rates. Your credit score will also not be affected by applying for information. When you consolidate your debt and secure a lower interest rate, you’ll pay much less over time.
You have the power to take control of your student loans. Keep in mind, the sacrifices you’re making now will be well worth it when you’re debt-free.