A sizeable loan can make your stay at the university more bearable and fun. You’ll also be able to live more comfortably and enjoy financial freedom like never before.
But soon the debt creeps up on you, and you find yourself in such a financial mess that affects your finances for years. This is worth trying to avoid, especially if you don’t have a strong debt repayment plan.
Here are nine ways you can minimise your debt while at university and avoid this future financial burden:
1. Estimate university costs
Tuition fees form a significant part of university expenses. Not to mention the many other factors that you must consider as well, like books, housing, transportation, and meals. All of these need you to have a significant amount of cash.
An excellent way to dial down on taking possible loans for these expenses is by estimating the number of expenses that you may incur while studying. Then use this information to plan your finances early to determine the total out-of-pocket costs that you can manage and what to do with the balance.
Anticipating and preparing for university expenses puts you in a better position to minimise on loans that you take.
2. Limit living expenses
Campus life comes full of expenses that range from housing to meals and entertainment. It’s always tempting to want to eat out every night or live in an off-campus apartment. But you’ll need a lot of money to sustain this kind of lifestyle, which will ultimately drive you to seek out loans.
The best remedy for this is to be as frugal as possible and avoid any living expenses that may drive you into debt.
3. Consider other funding sources
You can also always opt for other funding sources besides loans to help with your living expenses. Applying for grants and scholarships are among the best alternatives to student loans that you can consider.
A college savings plan is another fantastic option to consider before going for a student loan. Where possible, you can also deduct your potential earnings from part-time jobs to use on your campus expenses.
4. Get a part-time job
Starting a side hustle is another brilliant way of minimising borrowing. Save a good portion of your earnings to help with your college expenses. There are also many online platforms such as fiverr that students can now use to earn an income and use the extra cash to supplement their tuition and other expenses.
Down the road, earnings from your side hustles can also help you pay off some of your loans.
5. Keep tabs on your borrowing
University isn’t a one-year enterprise. Student loans and other debts pile up along the way and can quickly get to a point where they are uncontrollable. It is, therefore, vital that you get a handle on your borrowing as early as possible.
The cumulative effect of what you borrow can overwhelm you when debtors start to collect.
6. Understand all payments
If you must borrow a loan, do so knowing that at some point, you will have to repay it. You should, therefore, make sure that you have read and understood all the terms tied to the loan, the deadline for repayment, interests accrued, and any additional fees and penalties.
7. Create a budget and stick to it
This is perhaps the simplest way of minimising student debt on campus. Creating a monthly budget and ensuring that you stick to it will help keep your expenses in check and prevent you from taking unnecessary loans.
Total up all your expenses and use this information to create a budget that you can stick to.
Here are some ways that you can trim your budget, so you minimise on the amount of loans that you take:
– Use campus resources
– Cut as many bills as you can
– Opt for affordable housing
– Reduce food and entertainment costs
8. Borrow only the amount you need
It’s critical to note that student loans aren’t free. You will eventually have to account for and repay every amount that you borrow plus any interests incurred. Therefore, the more you borrow, the longer it takes for you to pay off your debts.
Before you sign that dotted line, make sure that you’re only borrowing the amount that you need. This is good practice for reducing your loans, especially if you don’t need it.
9. Avoid using credit cards
Credit card loans come with very high-interest rates and fees. In most instances, they can even cost more than your student loan debt. It’s probably best to avoid adding a pricey credit card debt to your already troubling student loan debt.
Expensive lifestyles on campus make it almost impossible to dodge the bullet of student loans. But still, with proper planning, and smart moves, you can make sure that student loans and other debts don’t get the better of you. Be smart in your borrowing.