Sunday, July 1, 2012

Eliminate Student Loan Debt

Several options are available to graduates with financial burdens. Total debt absolution is very unlikely. Defaulting to try to eliminate student loan debt becomes more serious than defaulting on a bank or other financial advance. Defaulting on a student loan will take a good credit score and make it bad. A person who defaults on their financial debt will not escape payment. Defaulting brings severe consequences later on in life. Failure to repay the government advance will lead to deductions from a persons social security check. At a time when most people could use more money in the social security check, the deduction would create more financial hardships. Better is it that thou shouldest not vow, than that thou shouldest vow and not pay (Ecclesiastes 5:5).

An individual should also not think that filing bankruptcy would eliminate student loan debt. Filing bankruptcy will result in no credit card bills, poor credit, no home, no vehicle, but still stuck with a student loan debt. Filing bankruptcy to dissolve student financial responsibilities is next to impossible to accomplish. Filing for bankruptcy to move the financial advances will lead to a long, drawn out process, with tons of paperwork and hearings. Most often, filing for such an absolution usually brings no freedom from the debit. In many cases, the filing process alone causes strain and bad scoring on a persons credit report.

Hope to eliminate student loan debt is possible, but a borrower must realize that repayment is necessary. Most students graduate with multiple government loans. A loan is not a grant and therefore repayment is necessary. Several solutions to eliminating the financial advances are possible. Consolidation offers a recent graduate the opportunity to combine all debits into one easy monthly payment. An individual needs to know that federal and private advances do not consolidate. Therefore, if a graduate has federal and student debits, the result will still mean two payments each month. However, consolidating multiple credits enables a person to find the best rates and lowered monthly payments.

Many banks, credit unions, other financial entities, and online lenders will compete to offer the best rates to vie for a persons business. Most online lenders can be more competitive and offer better rates than any other financial institution. In the beginning process, a potential borrower should do some simple research on the Internet or speak with previous graduates to find the best solutions for consolidation. An individual, who is seeking to eliminate student loan debt, needs to figure out the best scenario for their repayment option. Looking at various consolidation programs, the interest rates available, knowing a persons credit score, and how much potential monthly payments might be will prepare a person for what a lender has to say. The following are some questions that a potential borrower should ask. How much of the payment goes to the principle and how much applies toward just the interest? What payment methods are available in regards to paying toward more of the principal? Can rates be negotiated after a few good years of payments? Can a rate or loan be lowered if automatic payments are taken from a bank or credit union account? Do good grades or a high GPA help obtain a better rate? Often times, lender can offer better rates for good grades, good payment records, and more. However, some lenders will not offer those options if not asked. A good lender will help a potential borrower to know what rates are available, the different programs available, and the various options for rate reduction that would apply to the borrower.

The other option to eliminate student loan debt is to seek out methods for loan forgiveness or possible cancellation. Debit forgiveness or cancelation occurs through a few methods. An individual who works in a government, public service, or nonprofit can obtain relief or absolution. A public service worker can sometimes receive total absolution after working 10 years in a public sector, such as a teacher, nurse, or social worker. Many government agencies also help cover college tuition or help pay past bills. Anyone seeking assistance with debit forgiveness or cancellation should look into working in a government, nonprofit, or social service agency.

An individual who has no credit history or a low credit score should be aware that any consolidation process would bring a higher interest rate. If a borrower keeps current in payments to eliminate student loan debt, he or she can speak to the lender about re-evaluating the loan and its rates and conditions. The borrower needs to keep on top of his or her credit. Refinancing and consolidating will lengthen the years of payment but lower the monthly payment by up to 50%. For this reason, if an individual can pay an additional amount each month, he or she should. Once a person finds a steady and higher paying job, he or she can also begin making extra payments, which will bring down the overall finance faster. The borrower needs to speak with the lender first to find out how the extra payments apply to the consolidation. Continuing to make payments on time and keeping current with new ways to negotiate better rates and debt reduction, an individual will be able to eliminate his or her debt with less financial burden.

Source: http://www.christianet.com/debtelimination/eliminatestudentloandebt.htm

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