Access to higher education has always been expensive, pushing many to take out loans to pay for their tuition fees. There are currently loans that are given out by the government, as well as some that are offered by various private lenders. Regardless of where one borrows the money, student loans have one thing in common, namely the fact that they must be repaid soon after an individual graduates from university. This may not sound difficult to do, however, most fresh graduates finish their university studies only to find out that they need to repay the loan but that they do not have a job or a home. In many ways, graduates are expected to adapt to this new situation in a matter of months, which can be extremely difficult. Luckily, there are ways to make repaying a student loan easier. Here is what you need to know:
- You Only Start Paying after You Earn a Certain Amount of Money
Most loan agreements specify that graduates are only required to repay their loan after they start earning over a certain amount of money. This can give many individuals a bit of breathing room, enabling them to hunt for a good job and to find an affordable home. When it comes to government student loans, the amount that must be repaid every month is usually 9% of the individual’s total income.
- It Is Possible to Repay the Loan Early
Almost all student loans can be repaid early, by making single payments of at least £5. This is usually a good practice if you ever find yourself reaching the end of the month with money to spare. While it may be more comfortable to save that money for other purposes, in the long run, it is better to make the extra payments and repay the loan as fast as possible.
- Try to Budget Your Finances throughout Your University Years
One of the biggest mistakes that undergrads make when it comes to their student loans is that they do not think ahead. Individuals who are worried that they might not be able to repay their student loans, but still have one or two years of university left, can start preparing in advance. Putting even £15-£25 aside, each week can make things easier. The math is simple, 1 year has 52 weeks; if an individual saves £20 each week, then in one year, he can raise over £1000. This can be done even when individuals are on a tight budget as it is easy to find forms of passive income online. In most cases, tutoring others can help students earn enough to save money for their loan repayment.
- Talk to Your Employer
Some companies that hire fresh graduates often offer to help them repay their student loans. This is usually done through an agreement where an individual agrees to work for a certain number of years for the company. In exchange, the companies offer to support the monthly repayments. Keep in mind that there are also situations where employers may agree to pay more money to students from which then can redirect a portion towards repaying the loan.
- Consider Getting a Personal Loan
In some cases, it may be more affordable to get a personal loan or even a payday loan in the UK and to use it to repay the student one. However, this is only possible if the personal loan has a lower interest rate than the student one or if there is an emergency that can leave an individual unable to make the student loan payments.
Keep in mind that each of these tips is situational. As a result, some may only work in certain cases. This having been said, try to implement as many as possible into your repayment strategy. This will make it considerably easier to pay off your student loan