Posts Tagged ‘Student Loan Debt’

Aug

6 Basics of Student Loan Debt Consolidation

Author: Sally Croft

The thought of repaying on your student loan usually never occurs until after graduation and you have six months left to start paying back these loans. If only repaying these large student loans were as easy as taking them out, we would all be looking forward to making those loan payments, but that’s not the reality. Did you know that almost two out of every three undergraduates walk off the graduation stage with some form of student loan debt?

1. Consolidation As A Viable Option

Many students consider consolidating their student loans as a way to have one low monthly payment rather than making multiple payments to different lenders that may add up to a much larger monthly payment.

2. Will Student Loan Debt Consolations Work For Everyone?

Although student loan consolidation has its benefits, it may not work for everyone. Federal loans in particular cannot be consolidated with private ones. This can pose a problem for graduates looking to consolidate all their student loan debts.

3. Consolidating Your Student Loans May End Up Costing You More

Consolidation loan repayment plans may offer a much lower monthly payments, but you have to remember that they also add on interest costs by stretching out the life of the loan. So you can end up paying double the amount of interest over the life of the loan.

4. Student Loan Debt Consolidation Basics

Before you consolidate your loans you should read the terms carefully until you fully understand and is happy with everything. You may also want to ask these very important questions to your consolidator to get an idea of what your loan will entail. This could be a 20 plus years contract you will be signing so you want to make sure you know everything there is to know about your student loan consolidation. Here are the four basic questions:

1. Are there any origination fees?
2. Are there any prepayment penalties?
3. What is the maximum interest rate?
4. What will be the life of the loan?

5. Steer Clear of Student Loan Debt Consolidation Prepayment Fees

Lenders who charge a prepayment fee will not be the best choice for you. You will want to have the option available to you if you decide to pay off the loan early without being penalized for it.

6. Stay In Touch With Your Lender

Once you have consolidated your student loans, you will want to maintain contact with the consolidation lender on any changes in your address, income or anything that may affect your ability to maintain current payments arrangement.

In Conclusion
Before you decide to consolidate your student loan debts, you should first do your research, learn the basics of consolidation student loans, and make sure that you are making the best decision for your financial situation. Consolidation may not be for everyone, but at least it’s an option available for those who need it the most.

Consolidating student loan debts, a good idea or a bad deal? Please leave your comments below.

Tags: student loan consolidation, Student Loan Debt
Posted in student loan consolidation | 1 Comment »

Jul

5 Best Reasons why you should monitor your Student Loan Debt

Author: Sally Croft

As an increasing number of college graduates are facing financial hardships, the government has created a variety of programs to help you manage your student loan debt- ranging from ways to lower your interest rate on federally insured money to federally mandated debt reduction and forgiveness programs. While you may not qualify for all of these programs there maybe something for you. However, you do need to keep track of your loan balance so that you will know which programs fit your unique situation; you qualify for and can participate in. In order to be a responsible borrower and to make your life much easier, you will need to monitor your student loan debt.

1. Update your budget:

Monitoring your Student loan debt and being aware of your total debt level helps you to update your budget based on your post-school life and current life. Doing this helps you to make responsible financial decisions. Take into account the following to know where you were, where you are and where you need to be:

Your salary
New expenses
Old expenses
Transportation
Student loan payments
Savings

2. Know your loan balance:

Keeping track of your student loan balance and making regular payments are the best way to ensure that you do not allow your debt to get unmanageable. Both while you are in school and after graduation. By being aware of your balance you are less likely to spend frivolously when you see your total balance increasing.

3. Lower interest rate:

If you become passive about your student loan, you will potentially pay more over the life of the loans than is necessary. Keeping track allows you to take advantage of shifts in interest rates and other available assistance programs. Being involved increases the chances that you will not miss chances to lower your interest rates.

4. Refinancing:

Student loan may be refinanced to take advantage of shifts in interest rates. Knowing your principal balance is the only way you will be able to accurately gauge which shifts are great opportunities to take advantage off and which are not. Guaranteed loans from the Government for example, tend to carry lower rates and offer fewer refinancing options. Private loans, on the other hand carry higher rates. It is important that you refinance your student loans when the time is appropriate because your saving can be significant.

5. Loan Consolidation:

If you have more than one student loan and is having trouble making your monthly payments, you should consider student loan consolidation. Take the advantage of consolidating your loans when the opportunity is available and also avail yourself to other money saving opportunities.

These are just a few reasons to monitor your student loan balance. Please share with us other reasons why a student should monitor their student loan debt.

Tags: student loan, Student Loan Debt
Posted in School Loan Debt, Student Loan | 1 Comment »

Jun

Best and worst of taking Student Loan Debt

Author: Sally Croft

The majority of college students graduate with a huge amount of debt. Most students have to taken out student loans to help with the rising cost of college tuition and other fees. But are all student loans built alike? Taking out loans is normal and a good investment in you and your future, but not all student loans are built alike. There are some good and bad of taking out student loans – let’s take a look at a few.

Public, Federal Student Loans and Private Student Loans

Public, Federal Student Loans for the most part are good debt. These loans have lower fixed interest rates and flexibility when it comes to repayment. Federal loans do not have to be paid back until four to six months after graduation. This six months gap can give you time to land some income so that you can start paying back on your loan.

Private Student Loans are like credit cards debt. Private student loans give you no say in terms and agreement, the monthly payments are due no matter what your financial situation and interest rates are much higher than federal loans.

What if I cannot pay back my student loan after six months?

If you have not find a job or do not make enough money to afford the minimum monthly payments on your student loan; you can repay your loan by selecting one of the following options: extended repayment, graduated repayment, deferment, forbearance and income-based plans. Talk to your lender to see which option is best for your unique situation. But not making payments on your student loan will not make it disappear; actually the situation will only get worse.

Can I have my Student Loan Debt discharged?

Absolutely not! Student loan debt is never dischargeable, even if you filed for bankruptcy. There is just no way to avoid paying back your student loan, so the best thing to do is to devise a plan and just pay it back.

Are all Student Loans bad?

Most student loans get a bad rap, but all student loan debt is not bad. In most cases it is the borrower of these student loans who are making a good situation bad, when it takes is communication. Simply talk to your lender and make special arrangements for repayment.

There is good and bad, but to make student loan debt the good debt that it can be, make sure you do your research, borrow smart and have a plan to own up to your responsibilities and pay it back.

What’s your opinion?

Tags: Federal Student Loan, Private Student Loan, Student Loan Debt
Posted in Federal School Loan, Private Student Loan, Student Loan | 2 Comments »