Student loans are a fact of life for many people who go on to pursue a post-secondary education. And the repayment for your student loan can feel like a never-ending burden. While there is no magic wand to make the loan payments go away, there are some strategies that you can use to pay it off quicker so you can start putting more of your hard-earned money into savings and investments that will benefit you down the road.
If your student loan is from years ago, it may be at a higher-than-current loan rate. You may be eligible to arrange for a new loan to pay off your old loan, and continue payments at the new, lower, rate. But…and here’s how this strategy works best…keep paying your old payments on your new loan. Continuing with higher payments can take months, or even years, off the time it takes to pay off your debt.
2. Challenge yourself
The faster you can pay off your student loans, the less interest you’ll pay overall, so whenever you can, try to add a bit extra to your monthly payments. There are some creative ways you can squirrel away a few extra bucks. You can challenge yourself to prepare all your meals at home for a month and take the money you would have spent on dining out, or delivery, and add it to your monthly payment. Or…try going dry for the month of January and your bar budget money can be used to increase your loan repayment.
3. A little goes a long way
Whenever you get a small bump to your income, use at least part of it as a balloon payment for your student loan. Got a birthday cheque from Grandma? A tax return, or maybe you won $100 on a scratch ticket? Don’t think of these as “found money”…think of them as “found payments”!
This article is for general information purposes only and should not be considered specific or personal investment, insurance, estate planning, legal or tax advice.
- Personal finance and saving