One of the major financial obstacles that millennials face today is paying off their student loan. These loans prevent new graduates from grabbing new financial opportunities. It is found that the average student debt for 2016 graduates is $37,173. Here are five ways you can get out of this debt.
1. Think of loan as a mortgage
Treat the loan like a mortgage and pay larger amounts to cut the principal faster. This will result in fewer interest charges. So, the entire loan amount will come down. Another way is to pay twice a month, instead of once. By paying off the loans early, you can use the money you are earning now in some good investments.
2. Have a 3 to 5-year plan
You can make a 3 to 5-year plan to clear your debt. You should know exactly when the loan ends so that you can make a good plan. If you have a goal in place, you will know exactly what to pay each month. So, it will become part of your monthly routine, just like paying for your telephone or cable TV.
3. Have a college repayment fund
You can try to save an extra $100 or $200 in a separate account by automatic savings. This will speed up repayment. This is like forced savings and is a very effective method. Make sure that the amount deposited here will only be used to pay off college debts.
4. Take up a part-time job and start to repay early
You can earn some extra cash while studying in college. This way you can start early to pay off your college debt. This will lower the loan amount, and you will have to pay less after you graduate.
5. Don’t live for today, concentrate on future
Don’t spend on expensive items after you get a job. Your priority must be paying off your loan. So, focus on that. You can enjoy your life later.
People who are successful in life are those who are clear of their debts and are careful about saving money for the future. You should think of ways to save money instead of spending them on unnecessary luxuries.