Guide To Paying Off Your Student Loans

Now that the job industry is at its most competitive era, it’s crucial to have a strong educational background to land a well-paying job. However, not everyone has the financial capacity to pay for four years’ worth of college tuition fees and dorm accommodations. Because of this dilemma, most students are forced to take out loans to pay for college, fill financial gaps, and have enough funds to cover living expenses.

Although student loans offer a great opportunity that allows students to push forward with their chosen majors, most of them are too young to understand the terms and conditions associated with student loans entirely. And once they graduate, they often fail to pay off their student loans on time because of new goals and responsibilities. However, it’s important to note that lending services thrive on interest rates that pile up as time passes. So, the longer it takes for a student to repay their loan, the higher the interest rate will be.

To make things easier on your end, here are some helpful tips to pay off your student loans.

Your Guide To Pay Off Student Loans

1. Pick An Appropriate Repayment Plan

Overall, federal college loans offer the following repayment plans that cater to students with different situations:

Standard Repayment Plan

This particular repayment plan sets up the exact payment amount on a monthly basis, with a minimum amount of $50. The standard repayment plan allows students to pay off their debt within ten years.

Graduated Plan

After graduating, you might find it challenging to pay off your student loan within the given period. To help you out, the graduate plan offers a more flexible payment scheme wherein it will increase your payments every two years, payable for ten years.

Extended Plan

If you’re looking for a more long-term plan, the extended plan offers a fixed or graduated payment over 25 years.

Five Income-Driven Plans

The five income-driven plans allow lenders to make fluctuating payments depending on your family size, annual income, and other factors. For example, the Pay-as-You-Earn plan minimised monthly loan payments by up to 10 percent of discretionary income. Moreover, it forgoes the remaining loan balance after 20-25 years of consistent repayment.

Due to the ever-changing world, we live in, lenders allow students to switch to a different payment plan with no penalty. However, it’s crucial to understand that settling for a plan with a lower monthly payment will take longer to pay off. As a result, you’ll end up paying more in interest.

2. Set A Strict Budget

Now that you’re an adult with bills to pay, it’s crucial to manage your finances properly as early as now. Doing so will increase your chances of paying off your loans in a quick manner.

For starters, you should carefully plan and understand your monthly cash flow. Then, assess your spending habits by keeping track of your expenses for a month.

Afterward, you may set a budget for food, rent, and transportation to avoid falling off the budgetary wagon. Finally, on special occasions, you may have a set budget to use for gifting to family members.

3. Find A Side Hustle

To pay off your debt, you should have a source of income. However, you might find it challenging to find full-time work because of your busy class schedule. But do not fret because nowadays, there are various side hustles you may try to make extra money.

To do this, you should figure out your strongest suit.

Did you excel in a particular course during the previous semester? If so, you could tutor fellow students during exam season.

Do you find creative writing fascinating? Then you may check freelancing platforms to provide articles in exchange for money.

If you’re interested in trade, you can buy and sell used items online for a profit.

You can do numerous things to save money while you’re in college – the possibilities are endless.

4. Pay As Early As Possible

As a rule of thumb, there’s never any penalty for making advance payments on your student loan. However, a caveat with prepayment is that student loan services may add an extra amount to the next month’s payment. This phenomenon advances your due date but won’t speed up your end date. To resolve this, inform your servicer that you want to apply overpayments to your current balance. Doing so will keep the next month’s due date as planned.

Moreover, you can make additional payments at any point in a month or make a lump-sum student loan payment on the due date. Whichever method of payment you use, you’ll surely save some money.

5. Make Biweekly Payments

Although it’s a fairly straightforward strategy, it will trick you into paying extra on your debt – pay half every two weeks instead of making one full payment each month. In addition, you’ll pay extra each year by doing this trick, cutting down your repayment schedule and interest rate.

If you need assistance, biweekly student loan payment calculators online will help you see how much money and time you can save.

6. Take Advantage of Discounts

Most lenders offer a 0.25 – 0.5 percent discount if you set up an automatic payment scheme on your loan. Moreover, private lenders may also provide other interest rate discounts if your account meets specific criteria. You’re more likely to be offered these discounts if you’ve reached a certain number of on-time payments or taken out a different loan with the same company. Albeit small, these discounts will get you out of trouble quickly. In addition, they will significantly lessen your balance when you look at the bigger picture.

Final Words

Taking out a student loan is a valuable way to go through college without paying expensive tuition fees, making education more accessible to everyone. However, you should constantly remind yourself that it’s not for free – it comes with high-interest rates that will grow exponentially over time.

To prevent paying more than you need, you should maintain a healthy relationship with money and pay your dues on time. And by following the tips in this article, you’ll be well on paying off your student debt on time.

How to Save Money for an Emergency Fund: Explained

Money has always been a limited resource. No matter how much you sort out your finances, the fact that you would eventually run out is just unavoidable. Inevitability and uncertainty are life’s worst enemies, and the same could be said with unexpected expenses, which are always almost associated with emergencies.

And speaking of emergencies also comes the importance of having an emergency fund.

Why Create an Emergency Fund?

An emergency fund is a sum of money set aside, particularly for unexpected expenses. It is basically a safety net for your finances, which you can fall back on and gain plenty of time to get back on your feet.

Having an emergency fund means you won’t have to put yourself in debt or rely on others to sustain your needs, which backfires more often rather than helping solve the problem right at hand. Preparing for emergencies might sound trivial at first, but this would prove to be useful when the time of need inevitably comes.

But as easy as it sounds, kickstarting an emergency fund might be quite difficult for some people. So, the question lies: how could you save money for an emergency fund?

5 Ways to Save Up for an Emergency Fund:

1. Plan Ahead

Most battles were won by those who had planned ahead for the longest time. The same could be said when it comes to managing finances and saving for an emergency fund.

Being able to gauge what emergencies might possibly happen in the future should be a good starting point. Once you pin down what your priorities are, the mindset of setting aside money for future emergencies could become a less tedious task.

2. Budget Smarter

Most people nowadays work a nine-to-five job, and the truth is, the income is really just enough to cover an average person’s daily expenses. The idea of saving for an emergency fund often becomes the least of someone’s priorities due to budget constraints. But instead of ruling out the possibility of saving for a contingency fund, smart budgeting could help create extra breathing room for emergency funding. As the saying goes, “Work smarter, not harder.”

Try to keep tabs on where your monthly budget is going and cut back on expenses where you can. A little tweaking on your spending habits can help free up more money to contribute to your emergency fund.

3. Avoid Unnecessary Expenses

Cutting back on unnecessary expenses is probably the simplest way to make leeway for extra funds without completely changing one’s budget allocations. One good example of this is instead of going out to the movies or eating in a fancy restaurant, renting a movie, or cooking at home might do the trick. Who knows? It might actually turn out to be a more fun experience compared to the former.

You could also start doing your own laundry instead of regularly going to laundromats, which are not really cost-efficient in the long run. Not only will you save money from laundry, but you will also get much-needed freedom when it comes to washing your own clothes.

4. Find a Side Hustle

One good thing modern times have taught us is that it is literally jam-packed with opportunities. Finding side hustles is easier than ever thanks to the internet, and the best part is you could present yourself as a freelancer as long as you have the skills and talent to accompany you. The great thing about freelance work is that you can often set your own rates and hours, which means it would not get in the way of your main job. The extra cash earned through side hustling could then be funnelled towards your emergency fund.

5. Create a Separate Account for Your Emergency Savings

Temptation is hard to resist especially when it involves money. Keeping your emergency savings in a separate account could help avoid using your saved cash for expenses that are not emergency related. One common problem for people trying to save money is they tend to mix in their savings with other expenses which makes it even more tempting to spend and defeats the actual purpose of saving cash.

Additionally, having a separate account for your emergency funds could help you track your progress towards your goal. When you can see your savings grow as time passes, it could get even more motivating to stay on track in saving more money. Keeping your emergency funds in a separate account could also help you earn money interest. It might not be much but the longer your emergency savings stay in a different account, the larger the interest could become.

Final Thoughts

Emergency funds are hard to appreciate in the meantime when things are currently good. One thing is for sure though, its importance will shine through once you find yourself in a pickle and having an available source of cash will speak for itself when the time of crisis comes. Building an emergency fund might take a while but once you do, you’ll surely be prepared for whatever life throws at you.

Building an emergency fund is a vital step toward achieving financial stability and peace of mind. By following the strategies outlined in this guide, you can save money systematically and be well-prepared for unexpected financial challenges. Remember that financial security is an ongoing process, and regularly reviewing and adjusting your emergency fund is key to your long-term financial well-being. Start today, and take control of your financial future.

Ways to Earn Extra Cash on the Side: Explained

Some extra cash is always useful! Money is tight. Bills continue to rise, but your pay check remains the same. While you have tried to find an alternative job that offers a more lucrative salary, there’s nothing available at the moment that fits your skills and experience.

Is all hope lost? Will you have to start selling your possessions and cutting back on luxuries? The answer to these questions is ‘No’. That’s the case if you are willing to earn extra cash on the side – which is likely if you’re reading this article.

In 2020, 27% of people in the United States took on side gigs to put more money in their pocket. While far from an ideal scenario, it is a convenient one that can free you from financial restraints.

If you’re wondering how to bulk up your bank balance, here are four effective ways to earn extra money on the side:

Delivering Shipments

If you have a mode of transport, there’s the possibility you can carry out deliveries for extra cash. Your mind might instantly be transported to delivering fast food for a local takeaway joint or through a platform like Uber Eats, but there are other solutions available when you want to start delivering products to customers.

When searching for shipping work, Shiply is a great place to look for work. This platform’s load board is constantly updated with new jobs as thousands get added each day. It’s simply a case of finding local jobs you can carry out, putting in a bid, and, if selected, completing the delivery. There are no set hours or quotas to meet, which means you can come and go whenever needed – ideal for a side gig.

Freelance Online

You don’t have to leave your house to make some extra coins. With online freelance platforms like Freelancer available, you can find opportunities in everything from logo design to writing blog content.

Getting started with online freelance work can be difficult – especially if you fail to have expertise in a certain field. Yet once you get the ball rolling and gain experience and positive customer reviews, the door opens to more frequent and lucrative projects.

Take Surveys

Admittedly, you’re not going to be rolling in money by going this route. Yet taking surveys is a straightforward way to add a little extra cash to your earnings. There are various survey websites you can sign up with, where you will be paid a small amount of money – or possibly receive a gift card – for each survey completed.

Start a Business

This may seem a little too drastic as a side gig, but it’s possible to run a small – and profitable – business on a part-time basis. For example, via marketplaces like Etsy, Amazon, and eBay, you can resell products found at thrift stores or even make your own creations like jewellery and paintings.

Of course, the possibilities are endless in terms of what business you can start. Plus, if it takes off, you could even scrap your current job to focus on your company full-time!

Article Conclusion

In conclusion, the opportunities to earn extra cash on the side are vast and varied. Whether you’re looking to supplement your income or build a substantial side hustle, there’s an option that suits your skills and preferences. Remember, success in any of these endeavours requires dedication, consistency, and a willingness to learn and adapt. So, explore your options, take the plunge, and watch your income grow. The world of side hustles is waiting for you to dive in and thrive.