Student loans are a significant cause of stress for young professionals with an average paycheque. They pay hefty instalments each month and struggle to meet other ends. Some of them are even trapped in a debt cycle where one loan is taken to repay the other.
You are among thousands of working professionals for whom managing the instalments are getting out of hand. Specific measures can help stabilise the situation without any extreme change in the lifestyle. Here, we have mentioned some ways to repay student loans to support the repayment.
Ways to Repay Student Loans without Any Hassle
Not to worry about your loan repayments as plenty of methods are there to utilise. Some of them are mentioned below:
Refinance the Loan
Student loan refinancing is an option many lenders in the country offer. You may receive a better offer with lower interest rates depending upon the payment history. However, the current loan terms will determine the loan’s overall cost.
Some lenders charge a substantial foreclosure fee, making refinancing an expensive affair. You should also first ask the present lender for any deal on refinancing as they might offer you a new loan with flexible terms and interest rates.
One major drawback of refinancing is the processing time, which may take days or weeks to find reasonable terms from a lender. Add the time your present lender will take to process the foreclosure request.
Extend the Term of the Current Loan
Extending the term of the current loan will significantly reduce the instalments. You will find the repayments more manageable than before without going through the trouble of refinancing. Before accessing the lender, you must take a good look at the different aspects of extending the terms.
The overall cost of the loan will increase when the tenure is extended. Besides the interest rates, the lender may charge you some fee for term extension as agreed on the loan terms.
Every lender does not offer a term extension to its borrowers. You must check the loan documents carefully for the extension policies and charges. If applicable, you will enjoy lower monthly instalments to make your finances more stable.
Use Repayment Holiday
Many lenders also offer repayment holidays to their borrowers during an emergency or financial crisis. A few months breaks from repayment allow the borrowers to manage their finances after a setback. It will extend the loan term based on months taken off.
It is a temporary relief provided by the lenders to their borrowers. The instalments, interest rates, and overall loan cost will not change. You must use the holidays during severe financial troubles as they are limited in numbers.
Remortgage the House
You can use the equity over the house to get a remortgage at more favourable terms. The lower instalments will allocate space in the budget for student loan repayment. The process is somewhat similar to student loan refinancing.
The current lender may offer you a loan over the present equity of your house. The mortgage interest and instalments will remain the same. Only the duration will increase based on the loan amount.
You might want to use the amount to foreclose the student loan. However, it comes with a severe risk of losing the home to the lender if the payments are not made on time. You must consider it an option only if you have a real repayment plan.
Use Tax Benefits
Government offers tax benefits to working professionals paying off their student loans. The interest paid is deducted from your total taxable income for the year. Consult a financial expert to get the hidden benefits from tax to save substantial money each year.
Employee Benefits
Some employers offer benefit schemes to employees with student loans. It is similar to the pension or the emergencies fund provided by the vast majority of companies. Ask HR about the benefits before signing the job offer to get additional support.
As a business owner in Ireland, introducing education loans will encourage employees to stay longer. The number of employees paying off the loan in your organisation may very well amaze you. Some great talents in the industry are willing to work with an organisation that helps them repay instead of health benefits.
Invest in a Side Gig
You can start a side hustle based on your area of expertise to raise some extra money. Technology has allowed to start a business within a few hours at home. Start a business with an internet connection, a mobile phone, and a laptop.
Numerous online marketplaces provide space for your products to sell them to buyers worldwide. Spend a few hours outside the regular job to manage the online store capably.
Some students can get some work as freelancers if they have superior writing skills. You may make more money than your regular job from freelancing. You can switch to freelancing full-time as it has many perks, including freedom of hours.
Declutter the House
Many people have raised thousands of pounds after getting rid of the sentimental clutter from their house. If you do not use it ever, you make some money from it.
Again, the online marketplaces are selling millions of used items online to collectors. There are dedicated sites for a particular category of products to get your item’s best value. The money can help you repay the loan or at least the instalments for some time.
To Conclude
To sum up, these are some of the many ways to make student loan repayment easier than extreme budgeting. Prepare a backup plan to counter the tough times. However, you may find some solutions without a backup plan in the future that might seem a little expensive.
Now you can easily analyse that if problems are there, the solutions are also there to utilise. As a student, you must have good analytical skills. Therefore, your lender’s choice should be precise enough so that you can have maximum benefits of loans in Ireland.
