Higher-education loans can balloon over the course of a three- or four-year degree, and particularly when only minimum repayments are made. Paying off sizeable student loans as quickly as possible saves borrowers on interest charges and facilitates better financial planning for other life goals.
According to Matthew Burr, who managed to repay all of his US$74,000 student debt in just two years after completing his master’s degree, budgeting and learning to live within one’s means is essential. He explained that he sacrificed non-essential items such as expensive phone contracts and put off a new car purchase in order to repay his debt.
Burr added that he deliberately chose to work in a city with less expensive rent, and disciplined himself with a very strict cash budget of just $40 per week. He started making repayments immediately and made extra repayments whenever he could. He also took advantage of discounts for repayments made via automatic deductions from his account and focused on higher-interest debt first, reported Business Insider.
Managing and monitoring the debt is also important, advised Burr. He recommended that borrowers read the fine print, understand repayment obligations, and track the progress of their debt. This can motivate borrowers to repay more quickly and allow them to successfully manage their repayments.
