Student loan debt can be a hassle if you are carrying online cash advances, credit cards or car loan debt. the grace period after school is over runs runs out fast when you are busy setting up a new place, finding a job and trying to enjoy life after college.
Don’t use cash advances to pay student loan debt.
When it is time to start paying on your student loan debt, you will want to understand what type of loan it is. There are three different types of student loans. There is the Federal Direct Student Loan, Government Backed Student Loans and Private Student Loans.
- Federal Direct Student Loans come directly from the U.S. Department of Education. For most cases, these loans tend to carry the competitive interest rates and offers more flexibility. Within this category there are subsidized (the government will pay your interest while you are in school and during your grace period after) or unsubsidized(you are responsible for all interest).
- Government Backed Loans are loans which has been processed through a private lender, but the money is backed by the government.
- Private lenders offering loans without government backing tend to have higher variable interest rates. There are fixed interest rates offered now as well.
Many people struggle to make their payments. Student loan debt does not go away, especially if it is backed by the government. Be proactive to making your payments or finding a way to help yourself out so as not to fall behind. Defaulting on student loan debt will make your balance due in full. Collectors will get a hold of it, your credit will be affected and if it associated with the government, you wages can be garnished. Default student loan debt is rarely dismissed in bankruptcy.
Here are some options you have when looking for help with your student loan debt:
- You can request a 25% lower interest rate which if approved will be followed by setting up direct payments from your account.
- If you have multiple loans, try to consolidate them into one payment.
- You could ask your lender for a forbearance period. This will give you no monthly payment for a period of time, but the interest will still accrue on the debt.
- If you are going in to graduate school, the service, or are unemployed you can ask for a deferment.
- Try to adjust the repayment terms for your loan in order to lower the monthly payments.
There are some choices you could make to take large chunks off of student loans debt.
- If you work in a non-profit or government job, you can apply to have the debt forgiven in ten years. This is a “Public Service Loan Forgiveness” which provides incentive for graduates to work in a job which gives back to the community.
- There are certain cities in the U.S. which will pay chunks of your debt off for moving there after graduation. You may be required to live there for a certain period of time. It is innovative methods adopted by a few cities to revitalize their communities. There may be more cities adopting these programs in the near future.
Debt is a rough road for Americans right now. Your credit is effected by default debt no matter what kids it is. An online cash advance short-term loan, a car installment loan, revolving debt on credit cards or years of student loan debt can all hurt your credit if you do not make your payments as the contract states. The easiest way to fight debt is to not make any in the first place. Prioritize your payments and take care of your government loans first.
