Tertiary education makes it possible to have access to a broad variety of careers choices. Unfortunately, although there are government grants available to students, there is a pricey toll charge for obtaining this opportunity which comes in as tuition fees. The benefits of tuition fees are often felt mostly by the students who do not have scholarships or even family members who can help them foot the bill either using their savings or CPF.
For these students, working with moneylenders in Singapore to access a student loan seems to be the best solution for them. These students’ loans, for the most part, begin attracting interest immediately upon their graduation.
The widespread tendency of avoiding debt has led many Singaporean students to instinctively want to pay off their student loans once they are able to do so. The reason for this is the fact that the more time you take to repay your debt, the more the interest it is going to accumulate. This, in turn, will mean you will be paying more in total. Therefore, when you want to make savings on interest, you will need to consider doing all you possibly can to rid yourself off of this debt.
However, it is important for you to look at the many possible ways of handling your student loan debt to help be financially wise. Listed below are some factors for you to think about when formulating a holistic and sustainable plan to help you repay your moneylender student loan.
How Debt is Affecting You
It is important for you to realize that there is a lot more to repaying your debt than money and also incurring interests. Taking on debt means that you also carry the emotional price that comes with it, which can impact people in varying ways.
Some people are comfortable taking their time to repay their debt, recognizing that the accumulated interest for the charges is an essential part of taking out loans. In contrast, there are individuals who are irritated about having their loans accumulate interest over time. This should make them strive towards repaying their debt soon as they are able to.
So, although a little debt is no big deal, and when it helps your sense of safety to an extent by knowing that you have fewer commitments, then prioritizing the debt repayment is important for both the intangible and tangible benefits it brings.
Numbers are fundamental to your loan and the plan you come up with needs to be based on the math.
Below are a few questions you need to ask yourself to assist you in planning the personal loan settlement strategy:
- What is the total loan sum of your loan?
- What‘s the interest charged on the loan?
- What amount are you able to pay for each month?
- How much time will it take you to offset the loan?
- What amount of interest will you have paid over the whole loan settlement period?
It is essential for you to work out these particulars about your student personal loan. This is because they will have an impact on your priorities. Evidently, you need to work towards paying off your debts the minute you are able to do so as this will help you to avoid paying too much in interest.
Yet, all in all, it is rather simple to just apportion each dollar you can to pay off your personal loan. This is without taking into account what portion of your salary you will, in fact, afford to allocate to loan repayment, yet having sufficient to help you meet your other essential expenses.
Cost Of Huge Monthly Loan Installments
Having to apportion a big part of your monthly salary for loan repayment will mean that you are able to pay off your student loans a lot faster. However doing this will also give you a smaller amount of cash for taking care of other important things in life, such as insurance as well as cash savings for urgent situations.
It is important for you to have in place an emergency fund. This can typically be an amount worth of 4- 6 months’ of your expenses while you are repaying your personal loans. This way, you will be financially prepared, in case unexpected situation befalls you. For instance, should you experience a job loss, or when you go through a mishap that entails you having to pay large hospital bills, an emergency fund is able to sustain you during the difficult period.
When you do not have an emergency fund set up, you might wind up adding to your parents’ financial burdens. This is because you won’t be having enough cash flow to help you survive on during the tough period. What may well begin with good intentions could well get you into much worse circumstances than before.
Realistic Next Actions
You may begin by organizing your expenses to help you calculate the amount you will need to survive. Ensure that you set up realistic expense targets, therefore don’t put a significantly low budget for your own expenses. Even though you may do this with good financial intentions, you could end up breaking your budget for each month. This would impact your morale, together with your will to repay your debt over time.
It may be better, to begin with, a reasonable loan repayment amount for each month and then eventually increase the amount whenever you can. Possibly you will learn how to better optimize your spending, or also be rid of some recurring expenses by changing your lifestyle. Pay raises and periodic bonuses are a great way to reduce your debt, without having to “suffer” more.
There is no fast or hard of how you need to best divide your salary – each person has different priorities and needs. Even so, make a point to have an emergency fund, put in place a realistic budget for your expenses. And from there consistently yet patiently make the student debt repayments.