Loan Consolidation Can Help Graduates in Debt

Loan Consolidation Can Help Graduates in Debt

More than 36 million people are saddled with student debt. And with a sluggish job market, paying back those loans isn’t an easy assignment. Consumer Reports is offering up seven steps borrowers can take to get a handle on massive student debt:

Find out how much you owe and to what lenders. Even before you get your hands on your diploma it’s important to organize your student loans, determine the loan services, and find out the balance. Study your interest rates and repayment options. Find out if you are offered any grace periods.
Choose a repayment option. Once you consider your current financial situation and take on full-time employment, you’ll want to pay off highest interest loans fastest. This will help you save money in interest payments and theoretically get out of debt faster. If your total debt exceeds your first-year income after graduation, you probably won’t be able to afford payments under the standard 10-year plan.
Explore options if you can’t afford payments. Don’t reduce or skip payments without getting the proper permission. You could be reported delinquent or default. Instead, request a deferment or forbearance for federal loans.
Consider jobs or volunteer programs that qualify for deferment or forgiveness. Some public sector jobs like teaching, police and fire services, military and non-profit careers help you cancel federal loans.
Consider loan consolidation. If you combine your debts into a single payment you’ll experience increased convenience.
Think twice about going back to school to avoid unemployment. If the job market seems difficult you may be tempted to go back to school, but it’s not a good idea to rack up more debt.
Contact your lender immediately if you can’t pay. Don’t skip out on a student loan. Instead, communicate openly with your lender. This could help you avoid adding on costly late fees.

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