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Student Loan Repayment Advice From Experts: Become More Money Smart

Are you panicking about paying off your student loan? We have all been there. Graduating from college is one of life’s greatest accomplishments (especially in the midst of a global pandemic), so if you’ve just done it—or you’re only a few months away—you’ve done well. seriously.

But the thing about graduating – aside from the sad fact that you no longer live in a house with five of your best mates or being able to describe pasta as a balanced breakfast – is that you will now have to start paying back your student loan. .

Most students require financial assistance to pay tuition and housing fees, along with the cost of textbooks and other expenses, and although we may take slightly different loan amounts, the important thing to remember here is that the amount you will pay will be based on how much You earn it, not the amount you borrow.

As Student Beans, the top-rated student discount app, explains: “Once you are working full time and earning more than £27,274 a year, your student loan payments will be deducted from your monthly stipend before you receive it, in the same way as taxes and National Insurance. You will be able to From keeping track of how much you’ve paid by checking your payment slips and logging into your Student Finance account to keeping track of how much you’ve paid and still have to pay.”

Addition: “If your income falls below the minimum, or if you are temporarily unemployed, you will stop paying your student loan until you earn £27,274 a year again. So, you don’t have to worry about paying off your student loan if You can’t stand it.”

But that doesn’t mean you have to accept the above and get on with your life. There are ways to make money smart when paying off your student loan and make the whole process easier and more efficient.

Below, Louis Botton, editor at Student Beans, gives us his five best tips on how to get your hands on “loose” (it’s been a long day).

1. Use tax cuts and “find money” where possible

It is not uncommon to receive tax rebates at the end of the tax year if you have paid excessive tax. Despite the temptation to spend windfall income on yourself, Louis Bouton suggests using it to pay off your student loans. “Finding money doesn’t come along often, so if you are lucky enough to receive a tax deduction or get some inheritance, for example, it makes sense to put that into paying off your student loan to help you get one step closer to financial independence. However, We recommend that you only do this if you can afford it and do not have any other immediate financial needs that this money can support.”

2. Use biweekly payments instead of monthly payments

Most graduates are committed to making monthly payments on their student loan, but it can be more efficient to set up biweekly repayments, Lewis notes. “If this is something you can afford, it will help you make much more progress in paying off your student loan debt. Even if the secondary repayment is much smaller than the first, it is best to pay off even the smaller a little more over the 12-month period, as long as you don’t Increase your financial energy.

3. Register for automatic payment

If you want to make a constant effort to pay off more than you already are, this is the most efficient way to pay off your loan because it doesn’t require you to think about making additional payments so you can avoid delaying/missing those extra payments completely.

4. Stick to your payment plan

One of the most important tips is sticking to your payment plan. It is important that you meet the expected minimum reimbursement fees to avoid potential fees. For example if your situation has changed and you are now unemployed and can no longer make the payments, it is important that you contact the Student Affairs Department as soon as possible to notify them of your change in circumstances so that they can assist you further.

5. Avoid additional debt

Last but not least, the worst thing you can do while trying to pay off an existing debt is commit to another. Louis Bouton comments, “While more debt such as credit cards and overdrafts may seem tempting at the time, adding more debt will increase your financial stress and overall repayment period. Understandably, this cannot always be avoided but we recommend against using more of debt as a mode of payment where possible.”

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