There are millions of Americans, who are currently drowning in student debt. These individuals thought they would be able to take a loan, complete school and find a good paying job. Unfortunately, life isn’t always so predictable. Things can happen unexpectedly and this can throw a curveball into the equation. And unfortunately, this can make it incredibly difficult for some consumers to continue repaying their student loans. Below, you will learn how to make your student loan paying much more bearable, so you don’t default!
Deferment or Forbearance
First and foremost, you should remember that the mass majority of lenders are willing to help. These institutes benefit most when consumers are actually repaying their loans as intended. In fact, they offer specialized services for those that are unable to make a payment. One such option is the deferment. If you speak with your lender and they agree to the deferment, you will be able to delay your principal and interest. According to the Financial Hot Seat, this is one of the most popular options among borrowers, because it comes with no consequences. Alternatively, borrowers can also enter into a forbearance.
However, a little more caution is needed here, because the interest on your loan will continue to build when you enter into a forbearance.
Income-Drive Repayment Plan
Ah, graduation has finally come and now you have the credentials to get a decent paying job. This is a day that every college student dreams of, but of course life isn’t always this easy. In fact, many college graduates are left sinking in student loan debt. This can be a huge burden for any young person to carry, but it is something that can be altered to some extent. Of course, you will still be forced to repay the loan, but with an income-driven repayment plan, some of the burden can be lifted.
This plan helps design a monthly payment that is more suitable for your net income. You can speak with your loan servicer about this plan and he or she will assist you getting it set up. There are several different types of income-driven repayment plans. In fact, most banks or financial institutions will offer four different repayment plans for you to choose from.
- Pay as you earn
- Revised pay as you earn
These programs will give you the ability to pay off your debt in a much more convenient manner.
Be Smart With Your Finances
When it comes down to it, a lot of consumers fail to make their monthly payments, because they’ve been haphazard with their finances. Unfortunately, a lot of consumers will spend their money unwisely and this will lead to a default. It is absolutely essential to prevent this from happening! Once you’ve taken out your student loan and have completed school, it is essential to immediately find a job and begin working to pay back that loan. Take the time to carefully plan out your expenses and your income. If you cannot afford a new television, do not buy one! Keep your money for something more important and be sure to avoid the dreaded default.