For many individuals, getting a student loan is the only way to pay for University and, while there are many NGOs and other organizations that try to make the process easier, the fact that repaying the money is often extremely difficult. This is partially due to the fact that the loans are extremely large and it often takes several years to pay them off.
However, the worst thing for most is the fact that once they finish their studies, they are thrown out in a world where it is difficult to find and keep a high-paid job. The pressure of working to pay monthly expenses, as well as to repay a student loan can be too much for most, and this can easily lead them to more serious debt, as they mismanage their finances.
This having been said, properly managing your student debt takes careful planning, especially if you have just finished your university studies and are getting ready to repay your loan. Here is what you should consider doing:
Find a Stable Workplace Rather than One with the Highest Possible Salary
Although it may seem counterintuitive, it is usually better to choose a job that offers a large degree of stability rather than a highly-competitive one that is high-paid but also extremely dynamic. The reason behind this choice is simply that repaying a large loan first requires ensuring that you will be able to make the payments consistently.
If you are worried that your salary may not be able to cover both your monthly expenses and the repayment of the loan, try to create a budget and establish how you could spread the income between all the expenses.
Please keep in mind that this is in no way a suggestion to get a low-paying job, rather get one that allows you to make a decent amount of money, consistently.
Look for Sources of Passive Income
We live in a world that is constantly connected through the internet. This makes it now easier than ever to find sources of passive income. The best choice for graduates is to look at what they have learned at University and try to teach others. Some may prefer to tutor students while others can go for an online format such as Webinars. Regardless of your choice, this method will enable you to make £50-£500 per month that you can use to supplement your income.
Look for Ways to Refinance or to Consolidate Your Debt
If you’ve just finished your studies, chances are that you may also want to buy a car or a flat. Most lenders will agree to give you a loan for either of these things, however, managing both repayments at the same time can be difficult. This is why you should look for ways to consolidate your debt as soon as possible. Doing so will essentially fuse all your payments into one and make the debt more affordable.
Look at the terms and conditions of your student loan. In some situations, you may be able to refinance the loan or to repay it early (which is where the debt consolidation loan would come into play).
The important thing to remember when it comes to repaying your student loan is that once you finish your studies, you will have refinancing options that you may not have been aware of initially. Speak with the lender that you borrowed the money from and determine if there are any ways to either extend the term of the loan or to make the payments easier to handle. By speaking with the lender, finding a secondary source of income (preferably a passive one), and properly budgeting your income you will make your life a lot easier.