Student Loans or Headaches? This is How You Can Get Rid of Them
If facts are to be believed, Americans currently bear a student loan debt of $1.5 trillion. Isn’t it too much?
With the way cost of education has risen over the past decades to mind-numbing tuition-fee, parents and students have no choice but to opt for the much-hated loan. Graduates are often too tight at the wallet to afford the staggering installments, creating a lot of stress.
Does anyone have the remotest idea of an escape route? Well, experts say they do. If your student debt is more than you can handle, here are your best bets:
Debt Consolidation
pathdoc/Shutterstock: Debt Consolidation can help reduce the budgeting stress
High loan costs often mean that students have faced more than one tight spot while in school, which translates to multiple debts. These can get confusing as years go by, and keeping track of different terms becomes a disaster.
You’re better off consolidating all your debts into one, which makes the repayment process more manageable. At least the stress of budgeting your instalments gets lifted off.
Loan Refinancing
alexskopje/Shutterstock: Loan refinancing
You most likely got the loan back when you had a terrible credit score, which makes banks lend money at higher interest rates. Chances are, with better employment history and track records, it has gone up a notch.
So why bear the same cut-throat interest rates. Check your eligibility, and refinance your loans with a new fixed-rate and a lender who is willing to offer a lower monthly installment.
Requesting a Repayment Extension
Cris Kelly/Shutterstock: Repayment Extension
Maybe what you need is more time! To stretch out your installments over a more extended period until you get back on your feet.
If that is the case, extending the usual term of 10 years up to 25 or 30 would guarantee a smaller monthly payment. But there’s a silent-killer: Interest.
Seeking Income-Driven Repayment
Some borrowers, in federal loans only, can opt for the income-driven repayment, where you’re only expected to pay a percentage of your income, thereby lengthening the loan term, like the former option.
You are eligible for this route if you’re able to furnish enough evidence that your installments have put you in the officially defined term of ‘hardship’ level.
It would again mean you’re paying more as interest, but once your fixed term is expired, the balance is forgiven by the state. Of course, this is conditional with terms like good track history of on-time payments and bearing the income tax on the forgiven amount.
Weigh your capabilities, any other modes of income, and your pros and cons with these options. It will be easier to wiggle your way out of the debris sooner than you think!
More in Financial Planning
-
`
The Epic Battle: Unveiling the Epic vs. Google Legal Showdown
In a déjà vu moment for tech enthusiasts, Fortnite publisher Epic Games is gearing up for a legal battle against Google,...
December 6, 2023 -
`
Why Getting Loans From Your Bank Is Tougher Than Ever
Banks are ‘purposefully’ making the process of loans difficult. And there are multifarious reasons. New regulations are continually being introduced to...
November 27, 2023 -
`
The EU Sets 40% Women Workplace Quota to Boost Gender Equality
If there is a lesson we have learned from the corporate world over the years, it is that diversity is not...
November 18, 2023 -
`
Everything You Need to Know About Legal Asylum
You know, there is a word out there that has been both a beacon of hope and a subject of heated...
November 11, 2023 -
`
How to Avoid Hefty Energy Bills? 6 Effective Tips
The dreaded energy bill is no secret today. Every month, it drops in, and every month we wince, wondering, “How did...
November 3, 2023 -
`
Steve Harvey’s Financial Fall: Divorce From Mary Lee Harvey
Steve Harvey, the comedian and television personality we have all come to know and love, has seen his fair share of...
October 29, 2023 -
`
How Extreme Weather Can Sabotage Tourism-Based Small Businesses
Ever dreamt of owning a cozy beachfront café in Bali or a serene cabin retreat in the snowy Alps? If so,...
October 19, 2023 -
`
Everything You Need to Know About Debt Relief
Debt relief is a broad term that refers to strategies, plans, or programs that can help you reduce or eliminate your...
October 13, 2023 -
`
Money Management Tips to Improve Your Finances
Effective money management is the cornerstone of financial stability and achieving your long-term financial goals. Regardless of your income level, mastering...
October 6, 2023
You must be logged in to post a comment Login