University Financial Liabilities: Paying Everything Off Beyond Graduation August 25, 2008
Posted by janey in : student loans , comments closedAs if college weren’t hard enough, getting out of those hallowed halls may be the lesser of your worries. Once you leave the grounds you are faced with the challenge of finding a job - or starting a business - in your new career path.
This is much easier said than done since most companies want experience and, unfortunately for you, most college training does not count toward that so-called “real world experience”. It’s a problem because now that you’ve completed school you have something that is common among a majority of college students: debt.
The Struggle for Financial Freedom
You struggle to create a life for yourself, and the moment you are out the starting gate you’re confronted with an immediate hardship. You’re most likely well aware of debt by now in this stage of the game, but credit cards and some utilities aren’t even a comparison to the possibly of several hundred thousand dollars in school loans. Without a job you certainly can’t repay it in a timely manner.
Though you may figure it can wait, your college debt is not going to disappear, so there is no good reason to postpone the process of repayment. It’s important to realize the critical nature of debt repayment.
It’s also smart to be aware that many companies have added a policy to check potential employees’ credit records as part of their pre-hire considerations. So beginning to pay off that loan is in your best interest.
Repayment After Graduation
Student loans are typically deferred for at least six months upon graduation. This can unfortunately motivate the proliferation of “professional students” who are afraid to complete college, fearing the financial trap of their loans despite running up even more charges.
Don’t continue in school simply to postpone debt management and the repayment of your college loans. Have you begun to pay it or rather, like most, looked at it then casually discard it into the “I’ll pay this later” pile?
Granted, having no job means paying is hard if not impossible. However a college debt, as well as your other loans or credits, impact your credit rating. So even if you can only pay $20, do so. It’s a start.
Develop a Plan
The simplest way to get to that debt is to develop a budget plan. Make a list of all your fixed bills like car loans, rent, personal loans, etc. and add to that list your variable debt like credit cards. Prioritize the list and compare it against any income you may have.
For some bills, you can briefly postpone them or work with a creditor to lower payments over time or even ask them to temporarily stop charging you interest. Whatever money you have left should be allocated, at least partially, to your student loans.
Unfortunately the time to pay the loan without hardship may be long past. If you’ve ignored your college debt for too long, claims can be filed against you. It would then be prudent to seek alternative methods of paying off your debts, such as a personal loan. The interest will tend to be lower and the bill will get paid.
Don’t Put it Off
You need to repay your debts - college included - as soon as you can. You should practice debt free living at every step of your life. Think about simple things like extra clothing, trips, dining out and movies - all of which can be scaled back, if not eliminated, to help repay your loans.
Before purchasing such items, consider whether you really need them. If not, at least defer the expenses to later. Make the elimination of debt your higher priority.
Student Education Loan Debt Consolidation - The Advantages And Disadvantages Of Your Conclusion July 8, 2008
Posted by janey in : student loans , comments closedIn July of 2006, the interest rate on federal student loans rose. The impact is that these rates will remain high through 2012.
Should You Consolidate?
If your student loan has a variable rate, it is not such a good idea to consolidate the loan as you could end up paying a higher overall rate of interest. If you have a fixed rate, however, consolidation would be a viable option.
The Benefits of Consolidating Your Student Loan
* Payment - you will only have one payment to make each month and won’t have to keep track of individual payments and interest rates.
* Reduced worry - you will no longer live in dread of the phone ringing and hearing the voice of a creditor on the other end.
* Emotional savings - you will benefit from a reduced preoccupation over paying back your loan.
* More options when making payments - when seeking assistance for a student loan, you will typically be extended a higher degree of leniency when making your repayments. This can be of great importance when you have to adhere to a strict budget.
The Down Side of Student Loan Consolidation
Your new loan amount will most likely become larger. Many people do not realize that an increase in the amount of the loan is one of the consequences of going down this avenue. This is because by consolidating your loan you will be adding more years to it. You might be able to pay less every month, but it is at a cost. You could wind up paying much more over time.
Additionally, you are not guaranteed to be accepted for this type of consolidation even if it is a simple application process.
More Hints
If you are interested in consolidating your student loans, now is the time to do so. The result of waiting could be that you end up with a much higher interest rate.
Make sure you have sufficient knowledge of the process through debt counseling before engaging, and certainly before committing to a new loan. Take the time to read the small print of any agreements to fully understand your obligations before signing.
Assess various interest rates offered, and resist the temptation to opt for the first good one you come across. With a little persistence and patience, you will likely find a good interest rate that accommodates your financial need.
Opting for the lowest repayment plan you can find should, ironically, be your last choice. If you are in a position to make higher payments, do so. That will reduce the length of your loan and improve your financial situation more quickly. By selecting a lower repayment, you might have more money to spend every month, but you’ll wind up paying much more for your loan over the long haul.
