Nothing can get worse than this for young graduate: You’ve passed your college, but still unemployed. Adding fuel to the fire the letters from your loan servicing agency. You might be jumping with joy to have received such a letter. however, all you get is a rude shock wherein your past due has been mentioned in bold and you cannot afford that at the moment.
If this is your case, then worry not because millions like you are struggling to pay off their student loan debt. But, then a lot of are working diligently toward their debt repayment.
Here are some of the ways you can do the same too.
Your safe getaway strategy out of debt
When drowning in debt, especially college one, then here’s what you should do:
- Apply for forbearance or deferment - A lot of times, students like fail to secure or get hold of a proper debt repayment option. If you are too in the same tight situation, then you could well mull over applying either for forbearance or repayment deferment. These two options could work as your last resort, particularly when all the other modes of escape has been shut. Simply put, earning a forbearance from your lender will be of great respite to you, as it would grant you the permit to stop making the monthly payments for a certain period. For example, a typical forbearance period could last as long as 12 months. However, interests on the unpaid amounts will be added. In order to qualify for a forbearance, you can cite your economic hardship. Still, it is the lenders who have the final say in these matters.
On the other hand, deferment implies that all the interest as well as the principal loan amount will be postponed. In other words, you don't have to shoulder those burden. As per the government rules, you can qualify for a deferment on the basis of situations like school enrollment, unemployment, medical emergency, etc. You just need to ask your lender whether or not you are eligible for the same.
- Use student loan consolidation - Often, you’d find your peers as well as batchmates paying off their student loans via student loan consolidation program. This could be either a government-approved or a private one. Lets stick to federal student loans here. So, in case you have more than one federal student loans and you meet the necessary eligibility criteria, then you can take advantage of the student loan consolidation program. This way you’ll be able to roll your multiple student loans into one and even get a far better repayment terms to help you provide debt relief faster. For instance, one of the most popular federal student loan consolidation program is the Direct Consolidation Loan. This would extend your loans’ repayment period from 10 to 30 years. But, of course, you are going to pay a lot more interest on the principal loan amount in the long run. Still, you could comfortably pay off your debts in affordable chunks. Moreover, you can also apply and qualify for the Income-Based Repayment plan, wherein your monthly household income will be looked into before deciding a fresh loan repayment amount for you. To find out more about these student loan repayment options, you may visit here: https://studentaid.ed.gov/repay-loans/consolidation
- Discuss customized repayment plans - This is one of the most primary steps you could take and probably, most others like you do when they are stuck with their student loan repayment. You could use this option as your first line of defense against an impending financial catastrophe. Here, you’d have to call up your loan servicing agency and explain your financial condition to them. After that, you can discuss various personalized ways to pay back the borrowed money. However, you cannot run away from your student loan debt, as they are secured line of credit and will never be discharged in any kind of bankruptcy.
As, already discussed above, there are ample options for you to explore in order to get rid of college debt. But, all you need is some diligence as well as loads of self-determination to repay your loans no matter what.