When you consolidate your loans you have the option of lowering your monthly payment by extending the life of the loan. Over time you will end up paying more in interest, but you can make the payment manageable and lock in a lower interest rate. Once you are in a better financial situation you can increase the amount you pay each month to pay off the loan more quickly. This is a good option if you know your income will increase over the next several years as you advance your career. It also allows you to continue to make payments, so the amount that you owe is being lowered each month. It is the first option you should consider when trying to find manageable payment options.
02Apply for Income Based Student Loan Payments
You can apply for income based student loan payments, if you have a low income. This option will take account your current family size, and your income to determine the amount you will need to pay each month on your student loans. This will free up money so that you can cover the necessities for your family without the stress of student loan debt overwhelming you. You will need to reapply to this program each year, since they will continue to evaluate your income and family size. Additionally, you will need to stay current on your student loan payments to qualify. After twenty-five years of on time income based payments, you can have the remainder of your student loan balance forgiven. You do need to transfer your student loans to a Federal Direct Loan to qualify for this option, but it will be worth it to find relief from your current situation.
You can temporarily stop making payments on your student loans by putting it on deferment. Do not simply stop paying the loan. Contact your lender and explain your situation. The lender will have you fill out an application for hardship deferment. Keep paying on your loan until you receive notification that the deferment has been approved. This is a last resort for a time when you no longer have a job or if you have a financial emergency. Interest will continue to accrue while the loan is still on deferment. You do have a limited number of months you are allowed to put your loan on deferment. Be sure you only use this option as a last resort and when you are unemployed or in a very difficult financial situation.
Student loans are not usually considered in a bankruptcy. Federal law requires you to pay back your student loan no matter what. The only exception is if you were to become permanently disabled. If you are considering bankruptcy because of your student loans, you should look for a different solution, such as an extra job or a cut in your lifestyle to make ends meet. Private student loans are rarely forgiven as well. Take the time now to create a debt payment plan and to find a solution that will let you pay off your student loans so you can begin focusing on your retirement and building wealth instead of being overwhelmed by your debt.
Deal with Student Loan Payments
If you are having a difficult time making your student loan payments you may be looking for a way to get rid of your student loans. The only way to get rid of your student loans is to pay them off. However, lenders are much more likely to work with you if you are having a difficult time making payments then they would be for other types of loans. It is important to do something about your student loans now, instead of just hoping things will work out. If the interest rates on your student loans goes up, you may have an even more difficult time paying them off. Your student loans may be negatively affecting your finances and making ti difficult to save money or even pay your bills. You can apply these seven steps to pay off your loans more quickly. You should take these steps as soon as you realize you are having a difficult time paying back your loans.