Saturday, April 12, 2014
Student Loan Repayment and How to Lower Your Stress
When the time comes around to begin paying off your student loans, many college graduates find themselves facing an economical hardship. Below are a few suggestions to assist you in keeping the hardships to the bare minimum.
Recently, my niece graduated from college and obtained her bachelors degree in science. While this is a wonderful thing, the price tag that accumulated from this was a whopping $45,000.00! Her monthly loan payment is a little more than $500.00 each month. Due to being new out of school, she is in a temporary job until she finds a permanent one but still is required to meet these payments. If you find yourself facing the same fate, there are a few things you should consider extremely caully.
Of course, you MUST repay your loan debt and repaying it by meeting the agreed upon terms is your best bet. Try to plan ahead before that first payment is due. Many graduates find themselves unable to afford to pay this payment, even though they have tried to find a way to do so.
Defaulting on your loan is definitely not the way to go. If you can find another option, go for it. Causing a default on your loan will greatly impact your credit history. This can cause you a lot of financial problems for years to come. Many students have considered the possibility of filing bankruptcy to get out from under this huge mound of debt. This is not an option. In most cases, a bankruptcy will not write off a student loan. Only in extenuating circumstances will this even result in a reduction of your loan amount.
One suggestion to assist in helping make those payments much more attainable is to consider a student loan consolidation. A consolidation allows you to lump all of your student loans into one manageable loan. However, if you only have one student loan, a consolidation could still help you. You can obtain a reduction in your monthly payment as well as a longer repayment time frame. This can go as long as thirty years. Keep in mind that a loan consolidation will make what you pay overall more.
Another suggestion is that of applying for a student loan forbearance or deferment. This allows you to state what repayment terms you wish to abide by. If you find that your financial information changes, you can always change this at a later date.
1) Student Loan Deferment: A deferment is where your interest and principal amounts are postponed. You are able to postpone your loan repayment in certain circumstances. These will include: active military duty, attending college part time, or finding it impossible in locating a full time job.
2) Student Loan Forbearance: If you have applied for a deferment and been turned down, you might be eligible for a loan forbearance. Usually when you are in forbearance, you will be allowed to not meet your payment obligations. Keep in mind that your interest will still keep compiling upon your loan. This can really add up. Try to pay your payments as soon as possible so that you do not find yourself multiplying your mound of debt.
One way to reduce the overall amount of your student loan is to plan ahead so that you can apply for a student loan forgiveness. This is not available to new loans though. This would be available to you down the road. This is an opportunity to forgive your loan balance after making 120 monthly payments on time. You must have full time employment in order to be eligible for this program.
By thinking ahead to the future and trying to come up with a game plan of how you are going to tackle that big bill, you can dramatically reduce the amount of stress you place upon yourself. There are ways out there to help you pay your loan down, all it takes is a little bit of research to come up with the right way for your situation. Putting off thinking about how to take care of your issue will not help you at all and in all truth, will cause you more headaches down the road.
All of the suggestions listed above have quite a few rules and stipulations so checking into them regularly can help you to know if you will be eligible for the assistance that they can offer. Dont just assume that you will be turned down. A few phone calls is all that it may take to help you lower your stress and make things much more clear to you.
