If you are an university or a CEGEP student, you have many responsibilities to deal with. If you have selected to obtain a student loan to finance your education, repaying that debt is a major responsibility that can stick with you for the months and years to come. In order to decrease the stress that is associated with student loans debt, it is best to have a plan to pay back the money on time.
Here are seven tips to follow to better manage your student loan debt.
1. Know the lender’s conditions
Whether you are applying for your first student loan or an additional funding, it is vital that you be aware of the lender’s conditions. The basic conditions can range from repayment schedules to interest rates. Since the majority of loans are made available via the provincial government, you can read all relevant information online. In addition, it is wise to understand your responsibilities and obligations before, during and after the time that you plan on studying.
2. Borrow Only What You Need
Your education is just like any other consumer good like an iPhone or a laptop in which you should know the price tag. Having an idea of how much you will spend on your education will help you in applying for the right amount of funding in the form of a student loan. By borrowing the amount of the money that you need (not want), you can have a manageable loan to repay. It is very important to remember that your student loan money is meant to finance your studies and not your lifestyle.
3. Create A Budget and Stick To It
Creating a budget and sticking to it will make your life easier when it comes to repaying your loan. Setting aside the money that your make from your job and the expenses you’re likely to have that semester, you can budget the right amount of money to repay on a monthly basis. The faster that you are able to budget for your loan, the faster that you will be able to lessen your school-related debt.
4. Increase The Size Of Your Monthly Payments
If you have already budgeted the minimum amount of your monthly payment, consider adding more money to it. By working a few extra hours or saving more by cutting further weekly expenditures (such as coffees or cigarettes), you can put more towards your education financing. You will be surprise at how big of a difference an extra few bucks will make in terms of reducing the principal amount and especially, the interest. Do not forget that the financial assistance funding offered by the provincial government are in the form of low interest loans and they should not be taken for granted in terms of repaying interest.
5. Automate Your Payments
By automating your payments, you will prevent yourself from ignoring the responsibility of repaying loans. Using your budget, you can ask your bank to debit your account on a regular basis in the amount of what you owe the government.
6. Avoid Using Other Forms of Credit
While having a student loan to repay during your academic career, it is wise to avoid using other forms of credit (i.e., credit cards and personal bank loans). Not only does taking on additional financial responsibilities will add to your stress level if you cannot meet the obligations, it will affect the chances of obtaining future student loans and your credit history. If you must use a credit card to pay for books and other learning materials, be sure that the cash that will be used to pay the bill is in your bank account.
7. Make Some Social Life Sacrifices
Some students have difficulties managing their student loan debt can be linked to spending money in an irresponsible fashion. Rather than setting aside money to pay down their student loan debt, students spend money on going out with friends and having an active and expensive social life. By making a few social life sacrifices during a semester, you can save money to lessen the responsibility of paying back a loan that will take months or years to do so.
Once the government deposits the funds in your bank account, the money is meant to be used for your studies and to be repaid. In order to repay the principle and interest in a timely fashion, it is wise to have a plan and commit to it.