Are you looking forward to take college loan for higher education in Canada? With the educational costs skyrocketing in the country, student loan and funds are the sole savior. Besides, there is Registered Education Savings Plan by Heritage Education Funds. It’s a program under which parents can open a special savings account to accumulate savings to fund their kids’ education. For more information on the Plan, please take a look at https://www.heritagerep.com/.
Now, a college loan always comes with the burden of repayment. One has to be extremely careful about loan management and repayment to get rid of the debt on time. The post below shares insights on the top things to remember for easy loan management & repayment.
Sizeable and early payments
If you want to get rid of your college loan fast, try to go for hefty repayments. You can start repaying right from the 6 month grace or non-repayment period. If possible, start to make payments while you are still in college. Once you get a job, you will get entangled in many additional expenses like car or house loan. All these may affect your capacity to repay your old college loan on time. Thus, it’s advised to start paying early and that too with lofty payments. It will shorten your repayment period and help you to come out of the debt fast.
Enhance monthly payments
If you can increase the repayment amount each month, the extra sum will be applied straight on loan principal. It will reduce both the interest and total loan sum to be repaid.
Let’s describe the situation with an example. Say, your college loan amounts to $25,000 and carries 5.5% rate of interest. In this case, you will need to pay $7,555.88 over your repayment period, say 9.5 years. But if you can enhance your payment each month by minimum $50-$100, you will be able to save on at least 1/3rd of your interest.
Live in budget
Try to live in a budgeted lifestyle when you have to repay the loan. It’s better to refrain from any large additional expense as it may hamper your ability to repay the loan on time. For example, an international trip to celebrate your first job is a strict no-no when you are still under college debt. However, a short weekend trip once in 3 months would still be okay.
Chalk out a reasonable budget. Make one list for income, another for mandatory expenses and you should also have lists for savings, debt & luxury expenses. Try to cut out luxury expenses as much as possible for the time being.
Stay in shared apartment
It would be smarter to stay in a shared apartment with trusted friends than getting a whole apartment for your own. This way, the costs will be shared by all and you will have good lot to save and pay the debt end of the month.
Get another job
If possible, get a part-time job to make repayment easier. You can tap into your hobbies or any acquired skill to find an alternate career opportunity. For example, if you have taken a course on photography as a hobby, you may try to look for photography projects.