Your studies are complete, and if everything goes according to plan, you’ll have your diploma in hand in a few months. This is an exciting point in your life. But the end of an academic career usually goes hand in hand with the beginning of student loan reimbursement. At BLT Lapointe & Associates Inc., we regularly help clients deal with their student debt. In this article, we’ll give you 3 tips to help you ensure that you’re able to repay your loans with the least possible impact on your overall financial situation.
A brief overview of student loan repayment in Quebec
Normally, once a person finishes their studies, they need to discuss how they’ll pay off their student loan with their financial institution. In Quebec, there are a number of different options offered to graduates. As a result, some students may choose to start repaying their debt right away, while others can opt to postpone repayment for up to 6 months. The latter can be an excellent solution for those who are still looking for work after graduation.
During this period of partial exemption, it’s possible to only pay only the interest, or even to pay nothing—the accumulated interest is then added to your total amount of debt.
Here are our 3 tips to repay your student debt wisely:
1. Budget to determine how much you can afford
We can’t state this enough: make a budget—and stick to it. This will go a long way in helping you steer clear of financial difficulties. To figure out the amount you can afford to repay each month, rigorously keep track of all of your spending (this includes your other debts, if applicable) and subtract it from your total income.
2. Get informed about government support programs
Your income isn’t enough to cover your debt, even if you reduce your expenses? Don’t panic! Learn about the different debt repayment support programs offered by the provincial government:
- The Loan Remission Program (allows for a 15% debt reduction)
- The Deferred Payment Plan (takes your familial and financial situations into consideration)
3. Minimize interest by paying in full every month
Paying only the monthly minimum is a big mistake. Don’t forget that interest (at fixed or variable rates) accumulates slowly. So to avoid wasting hundreds or even thousands of dollars on interest fees, pay a large enough sum so that you won’t be penalized in the long run.
At BLT Lapointe & Associates Inc., debt management is one of our specialties. From Montreal to Laval and all the surrounding areas, we help our clients attain financial balance. Make an appointment today.