Student loans are a common source of debt held by many people today. In fact, as it currently stands, student loan debt is worth over $25billion in Canada. To say this debt is a problem would be over simplifying the situation. What we can say with certainty is that this significant student debt burden means many former students will need to budget for student loan repayments over the long term. If you are facing large students debts, Spergel can help. Below, we have listed some tips for student loan repayment.
Make a student loan repayment budget
If you are already out of school and are fortunate enough to have employment, begin by making a monthly budget for your student loan repayment that you can stick to. Knowing exactly what money is coming in and exactly what where it is going is critical. Use your budget to see how much disposable income you have at the end of the month available to make student loan repayments. If you need to cut costs, there are age old tricks that still work for cutting costs on your budget every month. You can shop for sales or with coupons, and decreasing impulse buys by shopping using a list and exact cash, for example. Don’t forget when making your budgets to incorporate money towards irregular expenses, such as car repairs, gifts, utilities, and so on.
Know your interest rate
If your loan is with Canada National Student Loans Service Centre, you can see here what the interest rate is on your student loan. Use that interest rate and your total student loan debt to give yourself an idea of approximately how much interest you will be paying on your loan annually. From there, you must make sure to make student loan repayments more than the interest rate if you want to start to pay down your student loans. You never want to be simply paying the interest rate, as the total loan will never decrease overall and could last for a long time.
Look into the Repayment Assistance Plan
If you are struggling with making a payment of even a small amount per month, look into the government Repayment Assistance Plan. If you are eligible, the government is willing to work with you to help you with your student loan repayment. After all, they want you to pay back the loans, if possible. If you do not ask, they will not help you so it is worth investigating this option. If you are struggling with payments, look into their options. From here, you can see if there is something that might help you get through the hard times and find a pathway to student loan repayment.
Speak to a Licensed Insolvency Trustee
If you have exhausted all measures and are still struggling with your student loan repayment, you should speak to an experienced Licensed Insolvency Trustee. At Spergel, we will work with you to discuss which debt relief options you may have. Even if your student loans don’t meet the qualifications for a bankruptcy or consumer proposal, a trustee can still help. Trustees can help you take care of other debt, like credit card debt or car loan debt through a bankruptcy or consumer proposal. This would free up your budget for student loan repayment.
Student loan debt is more common than most of us realize. Make sure to have a plan to pay it back over time and if not, reach out to someone that can help you take care of those loans. Book a free consultation with one of our trusted professionals by filling out our free assessment form online and we will contact you directly. You can also call us at 310-4321 or visit our nearest location for a free consultation.