Student loan resolutions amid post-Brexit interest rate uncertainties

After Brexit, there is a lot of fuss about student loan payments. Those who have just entered the job market are not sure what is the best move regarding their debts.

The main cause for concern is rising inflation following a lurking drop in the value of the pound after Britain formally leaves the EU. With rising interest rates, high inflation, and languishing wages, the debt burden potentially skyrockets for students, as well as young employees under 30.

It is a well-known fact that students in the UK graduate with the highest level of debt (in the English-speaking world). Despite spending all of 2017 in fear of skyrocketing student loan costs, it’s important to start the New Year 2018 with more practical and affordable resolutions.

A debt is a debt and it needs to be paid. You cannot escape financial obligations and live in debt until you are 50 years old. Similarly, it would be unwise to take out homeowner loans and pay off your student debts early to save the cost of interest. So what should be the ideal approach to paying off student loans in 2018? Let’s find out below:

Take it easy. Set your payment goal!

Despite all these factors that make the decision to prepay the loan difficult, it is important to remain calm and focused. When the economic landscape changes, it changes for everyone. Therefore, you are not the only one who will be affected by rising inflation or interest rates.

You should try to focus on a more productive approach, such as planning your loan payment without damaging your credit report. There’s no point in crying over spilled milk. She must try to figure out when exactly he could be debt free with his current job. It will help you stay motivated and stay on top of his financial goals. You can make a typical 10-year loan repayment plan and calculate your monthly payment to be debt free by the end of this year.

There are two paths to follow. You can choose to increase your monthly payments or work toward a lump sum payment to achieve your goal in the next decade:

Increase your monthly student loan payment

This approach might seem like a tall order to many, especially at the beginning of their careers. However, any contribution greater than the minimum monthly payment would help reduce the principal amount. Interest always increases on the principal balance and therefore will eventually lower the cost of your loan. There is no prepayment penalty on student loans. It is one of the convenient ways to reduce the burden of student loans at ease.

Make a lump sum student loan payment

If you don’t want to take baby steps and want to see a noticeable improvement in your payment goal, consider making a lump sum annual prepayment and drastically improving the principal each year. In this document, you must ask your lender to process the principal payment only. This way, you could reduce your student loan burden more quickly.

Another Approach: Refinancing Your Student Loans

However, should you find your student loan too overwhelming, you can choose to refinance in 2018. You can save thousands of pounds over the entire term if you refinance your loan now. You can consolidate your primary college loan along with other short-term loans at a lower interest rate. Many online loan partners help students find low-rate student loans. You can choose a long-term loan ranging from 5 to 20 years with a fixed or variable interest rate.

In general, setting your goals transparently can help you reach the goal more easily. As you define the payment plan in 2018, you can certainly enjoy 2028 debt free. All the best!