How can I pay off my student loan without building more debt?

Q:  I have a student loan debt of 38K. I don't make enough money to pay back the required monthly bill.  How can I handle this without accumulating more debt?

A: When you say "I don't have enough money to pay the required monthly bill" for your $38,000 of student loan debt, are you commenting on your original lender (or lenders) minimum payment(s) requested over the regular ten year repayment period?  If you're not already in a consolidation loan product, you perhaps need to be.

Consolidation loans allow you to s-t-r-e-t-c-h out your 38K in debt, and reduce the monthly payments to a figure you will find much easier to handle.  You can have at least twice the regular ten year time period to pay back your debt by using a Consolidation Loan, like the one my company offers. 

Or, you can check with your loan guarantor (generally a state agency or non-profit like USA Funds) to determine if any of your loan(s) qualifies for either a forbearance or even better, forgiveness. If your financial situation warrants, lenders will grant you a hardship forbearance to defer payments until you are steadier on your financial feet.  Consolidation is often the best answer to reduce the size of the monthly bite, but first extinguish all options to reduce your debt (many states offer loan forgiveness for teachers, nurses, police, National Guard, etc.), or defer payment until able.

Student Loan Debt Got You Down? Loan consolidation can help | Students Loan Consolidation

Lately, whenever we read the newspaper or watch television, the economic news always seems to be bad. The stock market is down, jobless rates are up, and financial opportunities are disappearing.

The economic news for college students attempting to pay for their college education has been especially bleak. The Los Angeles Times recently reported that, "The nation's four-year public colleges increased tuition and fees by nearly 10 percent this year, the steepest rise in more than a decade." These conditions, coupled with shrinking endowments and less money available as gifts from the private sector, have created an increased reliance on federally guaranteed student loans.

Student Loan Assistance Still Good Investment...

Even with all the apparent bad news, the investment seems worth it. The College Board estimates that college students will earn $1 million more than high school graduates over the course of their careers. The figures are even more impressive for those who continue on to graduate school.

...But Managing Student Loan Debt Has Its Challenges

The question remains, how does one repay these ever-increasing loans and how does one manage such sizable debt? Federally guaranteed student loans are traditionally issued as variable rate loans with a repayment term of 10 years. This arrangement sometimes contributes to the problem. In many instances, former students have not even secured employment when their loan payments are scheduled to commence. Also, many times professionals are faced with substantial start-up expenses.

In 1965, the federal government passed what has become known as the Student Assistance Act. This legislation made it possible for those with large loans to extend the term of the loan for a longer period of time, based on the balance. Some loans could be extended for as long as 30 years. This solution lowers the borrower's monthly payments, but the interest charges accumulate for a longer period thereby increasing the total amount due. It also enabled borrowers to combine many loans or several disbursements into one loan, thus the term, "consolidation."

People who take advantage of this ability to lower payments are only allowed to do so once, unless they omitted a loan from this process or they acquire additional loans after their original consolidation. When people "consolidate" their loans they enjoy the convenience of making a single payment, as opposed to several payments over the course of a month.

Fixed Student Loan Interest Rate Has Its Rewards

Borrowers may also convert the variable interest rate to a fixed rate for the life of the loan. Their interest rate is determined by a formula provided by the federal government. This new interest rate is a weighted average of all the loans combined.

The ability to "fix" the interest rate is of particular importance in the present economic climate. Interest rates for student loans are now at a 38-year low, so students and graduates should "lock-in" these historically low rates, which can never go back to the cap of 8.25 percent, where they were in June of 2000. The rates can only go down. Sandra Block, a columnist for USA TODAY, advises her readers to "Consolidate now, save a bundle later."

Some Lenders Offer Incentives for Paying On Time

While the initial rates are established by a federal formula, many lenders offer special incentives to good customers. Some offer discounts if you allow the lender to automatically withdraw the payments from your bank account. Others offer additional incentives as a reward for on-time payments.

Alternatives to Student Loan Consolidation

While all consolidation lenders must operate under federal guidelines, not all student consolidation loan programs are necessarily equal. It pays to shop around. Not everyone should consolidate his or her loans. For example, people holding Perkins loans should investigate the possibility of having their loans forgiven. Government programs exist that allow borrowers to pay back their student loans by performing community service. Teachers working in teacher shortage areas should also look into those types of programs.

Student Loan Consolidation Centers

A scholar credited consolidation centre allows you to harvester numerous types of central scholar loans with assorted repayment schedules into one finance with one monthly repayment.

It is best to seek for credit consolidation centers which proffer minimum charge of gain. A scholar is licensed for a limit of 1 percent saving on the pursuit tariff, if he pays on time for thirty six consecutive payments. While still presence teach, students having national directly loans are able to consolidate by using the central consolidation syllabus provided by the government.

The scholar consolidation loans decrease into two categories. They are government scholars loans and exclusive learner loans. Student consolidation mortgaged centers grant loans such as central, Stafford, professional scholar loans, attention scholar loans etc.

The government mortgage consolidation centre is providing a scholar finance consolidation series which allows students to consolidate outstanding tutoring loans into a sole new credit. This is not limited to a sole lender. Even if multiple lenders conduct the loans, one can still opt to consolidate. Two prevalent online scholar consolidation credit centers are Internet student loans centre and US student finance consolidation centre. Next student is another admired student mortgage consolidating centre. It is present student mortgage payments inferior by up to 60% or more. Sallie Mae lend consolidation centre offers central consolidation loans. The Citibank student loan corporation is generous central and exclusive loan consolidation. Wachovia consolidating loan centre is giving federal Stafford loans.

Students must only consolidate loans which are of erratic or varying duty such as the Stafford Loans. Never consolidate on preset-cost loans such as Perkins loans as there won?T be any pecuniary gain. Interest duty for college students who are already adults or on their way to sixth month mercy stage will be upper.

Consider Debt Consolidation to Improve your Bad Credit

Even still you may have a bad thanks history, debt consolidation may be a way for you to take dash of your position. For most people, being in debt is just a truth, but it does not have to be a bad thing. How well you handle your debt and pay your bills in a suitable form will reveal if you neediness to pertain for a debt consolidation advance. If you have more bills to pay per month than money pending in then you are bearing regarding a bad tribute rating. A debt consolidation character may be the answer.

Before applying for a debt consolidation mortgage, you will neediness to person out how much you owe. Begin by marks down a list of all creditors and how much you owe. In addition, enter the monthly payment due for each creditor. By assessing your debts, you will then be able to decide how much you owe and how much of a glory payment you can provide if you desire to consolidate. Consolidating your debts is one of the best customs of eliminating your debt. However, you should not be complacent. For those not recurring, this reasoning may give the payment stop or even mount the attract duty.

If you are departure to consolidate all your outstanding loans and character cards, then you should be able to ease for consolidation. If you own your own house, you can think a fairness advance with your home's appraised appraise and other equities to obtain the desired financing. Also, look at getting an unsecured lend. This could consolidate your debts into a lone low monthly payment lacking using your assets as collateral.

Many companies specialize in running all your debts without getting another loan. They will precision a fee for their army and in favor, they will negotiate with your creditors to have your relevance time lowered and they will take care of the payments you make every month. These companies have many methods to work out a propose for you and can lower your debt and eventually develop your praise ratings.

Take the time to curb out any debt consolidation guests. Ensure that the circle you are commerce with is entirely legitimate and have a very good reputation before agreeing to advantage of their army. Use the internet and invoice out the companies you are considering, if they are descent and in good fixed.

Whether you consolidate your tribute license debt or not, you essential to make a schedule of all your expenses for the month and evaluate your payments. This will give you a better idea of where all your money goes. You may be innocent that you are already spending so much on unnecessary matter and end using your glory card to obscure for other expenses. You should reach your expenses with what you are earning, signal a total will intensely help in managing your debt.

Having all your debts consolidated may give you relief and some money left over at the end of the month. Consolidating your debts will eventually prime to you having no debts at all and a better praise facts. Once you have consolidated your debt into one payment, put your belief cards away, and do not take on any more credit. Remember, the foothold of consolidating was to reduce your debt in the end and upgrade your credit ratings.

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