Blog Students Advice For Students 8 Steps to Repaying Your University Student Loan as Soon as Possible

8 Steps to Repaying Your University Student Loan as Soon as Possible

Many university students often find themselves at a loss when it comes to how they will pay their university student loans once they graduate. Considering how low starting salaries are in some industries (you are lucky if you are working in one of these high paying jobs), it will indeed be a challenge to pay off the loans fast enough to prevent interest from building up.

Fortunately, there are several ways to pay off your student loans as fast as possible and here are 8 ways to do it:

Check your loan repayment requirements

Every student loan comes with various loan repayment requirements that you have to be familiar with before you try thinking about paying it.

Some loans will provide you with a short window where you can focus on your work first and before you begin with repayments. Others do offer flexible payment terms, especially for the amount you have to pay monthly. During this pandemic, you can opt to defer your loan with details here.

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In case you got a loan that doesn’t charge interest before you graduate and will allow you to start with early repayments, it is recommended that you pay off the loan when you can before the interest begins. This will not only reduce the amount you have to pay once you graduate, but also reduce higher fees you have to pay once the interest kicks in.

Work out a suitable budget

If you get a job immediately, use your time wisely in sorting out your budget.

Have a budget and manage your finance to be ready for your loan repayments and even an emergency fund. For the emergency fund, the amount should be at least three to six months’ worth of your salary.

For the repayment budget, sort out all your expenses first and your other financial liabilities and deduct it from your pay. Once you see the balance, identify how much you are able to give to pay for your loan.

Get a financial app to track your spending

We all wish that we get financial lessons in school!

If you want to maximise your budget and manage your finances at the same time, don’t hesitate to use a financial app. Financial apps are available in both iOS and Android phones and they are designed to help you categorise all your financial activities.

Make it a point to review the app every week to see what expenses you can skip for the meantime to help you with your loan repayments.

Carefully Plan Your Starting Salary

For your first check, you need to compute how much you can take home and sort out your loan payment.

In Singapore, you will have to fork out CPF contributions of 20% of your wages and it is automatically deducted from your salary. As a result, you won’t get the full amount you may be expecting.

Once you are aware of the full take home pay amount, you can divide it efficiently through the 50-30-20 rule. The 50% should be allotted to your needs, 30% to your investments or hobbies then the rest goes to savings.

When you have those points sorted out, you can compute the amount you can pay for your loans by deducting your monthly expenses from the amount you saved for your needs.

Be disciplined to keep track of your loans

Although loan packages for students have flexible repayment plans, it should always be your main goal to pay it as fast as you can.

Always prioritise your loan repayments from your other expenses that you don’t need to pay for immediately like concert tickets or holiday trips. Once you pay off your education loans, you will be able to focus on your other financial liabilities and sort out your financial freedom.

While it is alright to do minimum payments, it is important to remember that it will only extend your loan term. A longer term will only add more interest to your monthly payments and increase your loan amount further.

You should also make it a point to check the maturity date of your loan because if you don’t, you may end up getting shocked of having to pay everything in full. Late fees must also be taken into account because they will be charged on you monthly so long as your loan is not paid.

Chip away at the principal with lump sum payments

There are student loans that will allow you to make additional payments without worrying about penalties. If you get a bonus from your work or have side hustles, use them to reduce your principal. You can also look into creative ways to save more money here.

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Once you get a raise or your financial situation is now stable, adjust your instalment accordingly. Doing this reduces the interest fees, especially if your interest rate is around 4.5% to 5.39%.

Invest or Increase Monthly Repayment of Loan

Once you have saved up some money from your work or managed to invest your money wisely, you can slowly increase your monthly repayments using the money you have.

If you are considering investing your money, you have to consider the risks of the investment you will be taking and how much risk you are willing to handle. We wrote a student’s guide to the stock market which you can check out.

If you plan to pay a higher monthly repayment, you can use some of the money you have for hobbies and savings then use it to pay off your student loan. While this will lead to you not having some shopping money or savings for the meantime, once your loans are gone you can enjoy.


Student loans don’t have to be a challenge to pay if you have a clear plan in mind on how to pay it. With these steps, it will hopefully drive you to the right direction and get everything sorted out for you. Remember, you will definitely need to sacrifice a few things for your loans, but once it is fully paid, you can enjoy financial freedom easily!

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Rum Tan

Rum Tan is the founder of SmileTutor and he believes that every child deserves a smile. Motivated by this belief and passion, he works hard day & night with his team to maintain the most trustworthy source of home tutors in Singapore. In his free time, he writes articles hoping to educate, enlighten, and empower parents, students, and tutors. You may try out his free home tutoring services via or by calling 6266 4475 directly today.