12 tips for paying off your student debt
For many students, studying means going into debt. To continue their studies, some do not have the choice to take out a loan, in order to pay their daily expenses during their studies or their tuition fees. These tips, taken in particular from the Young Adult Finances site, will help prevent students from falling into a spiral of debt.
During your studies
Work while you're in college - Working full time while in school can provide you with the money for a dream vacation or to start saving for retirement. That said, your grades might suffer a bit, as could your social life.
Apply for a scholarship and student loan - Depending on your financial situation and that of your parents, you may be eligible for government financial assistance. You can calculate how much you might get online. You also don't have to pay off your student loan while you study.
Borrow Only What You Need - Borrow only what you plan to earn in the year after graduation. However, if you are still in college and have no idea what to do next, start working full time now.
Increase Your Monthly Payments - Paying back a little more each month significantly reduces interest, as it accumulates over time. For the same reason, avoid paying only the minimum balance. Also make lump sum payments, since payments made while in school or during the six-month non-payment period will go directly to repay the principal of the student loan.
Look for Deals - Shop for flyers, shop for sales, and think twice before you buy. No saving is futile, especially if it allows us to pay off our debts faster. We invite you to also consult this list of tips for saving money during your studies in order to avoid debt as much as possible.
Claim the Tuition Tax Credit - You are entitled to claim this tax credit of approximately 15% of the amount of tuition fees for each year you are in school, which will help lower your tax bill.
After your studies
Take advantage of a six-month grace period - If you have obtained a student loan, you have six months before you start repaying it after you finish your studies. However, the interest becomes your responsibility immediately, unless you decide to pursue further studies.
Postpone Your Repayment - If after graduation you are struggling with huge debt and not earning enough to make your payments, talk to your creditor to request a deferral of repayment. If you are in dire financial straits, you can turn to the National Student Loans Service Center for help.
Payment terms - Another option is to take advantage of the various plans offered by your creditor to facilitate repayment.
Suspension of payments - If you return to school full time, your creditor will be automatically notified. This will be your opportunity to learn new skills that will help you get the job you need.
Claim the Student Loan Interest Payment Tax Credit - Each year you make a repayment, you can claim this 15% non-refundable tax credit. You just need to include the proof provided by your financial institution in your tax return.
You can achieve a good credit score by showing financial institutions that you can handle your student debt responsibly.
One of the best ways to manage your student loan debt is to pay off your loan as quickly as possible. It doesn't happen in a snap, but with these tips, you'll avoid debt traps and earn money on your degree faster.
For other tips and advice on better managing your personal finances, subscribe to the National Bank newsletter.
إرسال تعليق