As technology evolves and information empowers, Generation-Y is the boons of their age walk hand in hand with the worsening curse of economic hardship. Singapore is viewed as one of the few bastions of financial progress by the rest of the world that’s defying the recessive tendencies plaguing the global economy. However, the cold hard truth remains that young Singaporeans are caught up in the same rat-race-to-make-ends-meet lifestyle that everyone else faces.
The exorbitant cost of living coupled with an uber-competitive job market has ignited a massive shift in momentum towards the pursuit of higher education in order to attain as many qualifications as possible to give them a leg up when they finally do enter the job market.
Unfortunately, this trend has pushed an entire generation of unwary college graduates into the unforgiving jaws of student loan debt. No, we’re not merely talking about a few thousand dollars you can write off your first year salary check bit by bit and be done with it. These educational loan debts fall in the astounding fix to six figure range, which may keep you on your toes even when you approach your late 40s if things don’t go your way.
The deep depression in job prospects has made it nearly impossible for students to pay off their gargantuan loan amounts. However, we’re here to let you in on a few invaluable financial tips that can help you formulate a bulletproof student loan repayment strategy that allows you to break free from the chains of self-imposed austerity in just 3-4 years after you graduate.
The foundation of your repayment strategy is directly dependent on the student loan scheme, you subscribed to, such as:
a) Tuition Loan Scheme
b) Student Loan Fund
c) CPF Approved Education Scheme
Firstly, let us clear the misconception that your loan repayment voyage can only begin once you land you a fine job with your degree. A frugal and financially savvy lifestyle can help you make great strides in cutting down the pile of debt even before you graduate. Proactive budgeting, availing student discounts, utilizing public transport, and working part-time jobs are some of the intelligent traits of a student in touch with his financial karma.
- Killing off the Predatory Interest Loans First – Loan interest is what makes repayment, such a nightmarish meticulous endeavor. In case you have taken numerous student loans, always ensure that ones with the highest rate of interest are dealt with first. Once you have achieved that goal, focus all your monetary energies on disbanding the loans with a variable interest rate. The immense economic volatility is a dangerous variable to ignore, and can potentially cost you thousands of dollars more when interest rates spike up without warning.
However, this does not mean you completely hold out on the monthly or quarterly payments for the other student loans you have taken. You should continue making modest repayments for them as well.
- Never Delay Payments – Time and tide wait for no man, especially when he’s in debt! It is imperative to follow your student loan repayment schedule down to a science. Missing even a few series of monthly repayments can drown you in an unimaginable miserable pool of debt that are accrued as a result of the steep penalties incurred by you for not paying the required installments on time.
Remember, you’re not just getting a slap on the wrist by losing a couple of dollars as a fixed late payment fee, but also stacking up interest that is getting compounded for each day your loan remains unpaid.
- Let Your Tax Deductions Ease the Burden – When you finally kick start your job and begin the tax filing process, familiarize yourself with all possible tax deductions and credits you can avail of to strike off any liabilities related to your student loan repayments repaying student loans, remember to take the tax deductions and credits that you are entitled to.
- Spending Smart – Prioritized expenditure is the key to sustain a healthy credit history and a wealthy future. Exploit the frugal lifestyle in your initial job years as much as possible, because it will help you save up enough to pay your housing rent, food, energy bill, transport costs, etc. without sucking your savings account dry and unable to continue your student loan repayments.
You can opt to live with your parents, share accommodation, compare mobile service pricing plans, For purchases that are absolutely necessary, utilizing discount coupons for groceries, and a whole lot more to conserve hundreds of dollars each month to contribute towards your loan repayment.
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