Published on January 24th, 2017 | by Guest

The Ultimate Guide to Paying Off Education Loans Faster

Credit plays a significant role in everybody’s life, without a doubt it has great importance for you as a student. It really assists in decreasing the financial saddle from your parent’s shoulders and also plays an important role in paying off the credit over a period of time.

As a student you need credit in the form of credit card services and education loans. If you have developed a good repayment habit, it will not only help you in easy management of your finances but you can apply for a credit in the later stages as well. But, if you have a lethargic attitude towards the repayment of your student loan, then it can really create a setback for you. If your bank or the lender finds out that you are not making your payments regularly then it may negatively affect your chances of having an education loan in the future.

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Convenience Of Having An Education Loan

Nowadays, you can easily have a student loan. Reserve Bank of India (RBI) has specified low interest rates, owing to this most of the banks offer student loans on the prescribed interest rates. It is understood by the name itself that the student is the main applicant for the student loan. But, at the end of the day you need to pay back the education loan. The sword of the loan keeps hanging on the head on both you and your parents, until you have repaid the loan. So, here are some of the ways you can adopt to pay off your education loan faster –

Planning Your Finances

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Even if you have a spontaneous nature and don’t like making plans for anything, you cannot evade the significance of planning for your finances. You definitely need some planning that will help you pay off your student loan faster. If you are doing a part-time job, it is important you have made the payment for some part of the loan as soon as you get your pay cheque. This way you will certainly reduce your student loan.

Prepaying Your Loan

Prepayment of the student loan is another botheration. At times, it is not that easy to weigh the benefits and disadvantages as they often tend to puzzle people. For some people, repaying the loan is far more worrisome than the principal amount as the current education loan interest is near about 14 %. This is one of the key reasons that the students want to get rid of their loan as soon as possible.

Still, the education loan interest is deductible and this may provide some relief to the parents. However, this advantage is significantly reduced in the event where the loan is pre-paid, so you need to make a decision accordingly. Also, if you do make a decision of repayment, make sure you have read the terms and conditions carefully.

Waiting For An Apt Job

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Everybody dream of having their favourite job when they first apply for a job. Since our hopes and dreams are so big that we tend to neglect the job offers that don’t meet your expectations. This is a normal trend and a major reason for increasing the unemployment rate in India. It is important that you have a realistic approach towards your first job, mainly when you have taken an education loan.

Even if you are getting a job with a salary package of Rs. 15,000, as a fresher with education loan you should go for it. After all, you need to build your career and it is built step by step.

Remember – Loan Repayment Is Not Your Only Priority

As a new joinee, it has been seen that most of the employees, who have taken education loan, tend to get carried away with only the repayment of their education loan. However, as a new employee, it is critical for you to not get absorbed by the repayment of the student loan only.

You can also save a small amount for investment purpose as well. Make sure you realise that repayment of your loan is not the only purpose while working. You cannot ignore the investments as they really help in multiplying your funds over a period of time. You don’t need to be miserable while repaying your loan, as your education loan is just a small part of your personal life.

So, if you are looking to pay off your education loan quickly, make sure you have followed the above-mentioned points.

About the author:

Sophia is a writer by profession. She has a knack for coming up with novel ideas. She currently writes for EMI Calculators. She contributes ideas for latest technology and many more. She has also worked for scores of magazines, writing exciting content on various topics.

Tags: finance, guide, loans, paying off, ultimate