4 ways to pay off college loans quickly

College tuition fees are increasing every year. Many students are unable to pay this fee and have to rely on student loans. This loan is a huge burden for the student. Most students wait till they get a job to start paying off their loans. But you can start paying it off before you graduate. These are some ways to pay off your college loans fast.

Pay the principal early

When you start making pre-payments while in college, you should ensure that they go to the principal amount first, instead of the interest. Though it might happen automatically, it’s better to call a loan servicer and make sure about it.

Know the loans you should make the prepayments on

You can make prepayments on federal student loans. But if you have private loans, you might have to pay a fee to make the payments early. You should confirm what kind of loan you have before making the prepayments. There are two kinds of federal student loans. The subsidized loans don’t accrue interest when you are in school, but the unsubsidized loan accrues interest right after you borrow the money. You should pay the unsubsidized loan while in college so that less interest is accrued.

Cut off your living expenses

When you get a job, don’t waste your income on unnecessary things. You should spend money wisely and pay off your student loan first. For example, you can move back with your parents instead of renting a separate house or apartment and give away that money for your loan payments.

Refinance

There are many banks and other lenders who can refinance your student loans. If you are eligible, your new interest rate might be lower than your previous one.

These tips can help you pay off your college loans faster. So, you can enjoy a debt-free life from a young age. It is wise to start paying off the debt before you graduate.

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4 low-risk investments that can give you higher returns

When it comes to investment decisions, many people like to invest in low-risk options. Especially those people who have never invested before, they feel more comfortable in making low-risk investments. As the living cost is high, it’s important that we invest our money so that we can get some good returns. Here are some good low-risk investment options that can give you high returns.

Peer to Peer Lending

It is a good short term investment. In this kind of investment, instead of buying shares is a company, you are lending the money to someone else who will pay you back. You should screen properly and select the best loan rates to secure a good return with low risk.

Credit Card Rewards

You can get cash back credit card and earn points that can translate into money. Some of the top credit card companies give you very lucrative rewards, which are more than an online savings account or a Certificate of Deposit. For example, if you do $4,000 of your monthly shopping with the credit card, you earn 50,000 points which are worth $500 cash back!

Certificates of Deposit

You can get these certificates from your bank, investment broker or credit union. In this investment, you deposit your money for some time and get a guaranteed return on your money. You can get a fixed interest rate for the period. With a Certificate of Deposit (CD), you deposit your money for a specific length of time in exchange for a guaranteed return on your money. The amount of interest you earn depends on the length of the term of the CD and the interest rate at the time you purchased your CD.

Money Market Funds

It is a mutual fund that is for people who don’t want to lose the principle of their investment. These funds pay out some interest. The goal of this fund is to maintain a Net Asset Value of $1 per share.

You should consider all these options and choose the one that meets your requirements and conditions. All these have very low risks, and if you don’t want to lose your principle, then you should choose one or some of these options.

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5 smart ways to raise your credit scores

Most of us have heard of credit scoring; however, not many people know how important it is and how it can affect our financial life. A credit score is used to determine whether you are a reliable person for giving a loan, mortgage or credit card. The credit score depends on how well you handle your finances. If you pay your bills on time, then you get a higher score. These are some ways to improve your credit scores.

Have a credit history

You will have a low credit score if you don’t have any credit history. In such case, your loan application may be declined. If you don’t have a credit history, it shows that you are not able to pay off debt. So, lenders have a greater risk of giving you a loan.

Keep less debt

You may need to use different credit facilities every month to show that you can pay off your debts. At the same time, you should ensure that your debt is in control and doesn’t get too big. You should never use more than three-quarters of your credit cards and overdrafts limit. It is best to pay off your dues completely by the end of every month.

Don’t apply for too many credits

Some lenders conduct a ‘soft search’ during credit assessment. But there are lenders who conduct a ‘hard search’ when assessing you. During a ‘soft search’ there won’t be any trace on your credit record, but on a ‘hard search,’ your credit score may be affected. If you apply for too many loans, it might put the lenders off. So, it is best to check out the website of companies to find out how they assess their loan applicants, that is, whether they use ‘soft search’ or ‘hard search.’

Review credit file

You should request a report from credit reference agencies that will have all your credit repayment data from the past six years. Sometimes, the records may not be correct; for example, late payments may be reported incorrectly. You can do the necessary amendments so that your credit score improves.

Focus on doing the small things right

You should register yourself on the electoral roll, avoid moving house too much, avoid payday lenders, keep yourself away from gambling, etc. These little steps can improve your credit scores.

With a little preparation, attention and discipline, you will be able to improve your credit score easily. So, next time you apply for a loan, your chances of getting it approved will be higher.

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