Managing Student Loans Using Personal Finance Tools

For most ambitious students getting a higher degree in education is a goal. But we all know how expensive affording a higher education has become in recent times. So, if you want to pursue your dream and gain a higher degree, you will need to be able to master a few skills such as planning and maintaining a budget. This may seem elementary however, as you will soon realize it will be one of the most useful skills you’d have ever learnt.

Most students are not able to finance their higher education without some sort of financial help such as student loan, student grant, teaching aid scholarship, etc. Student loans are by far the most popular choice of financing higher education.

There are many clauses in a student loan that many novice students do not understand. The term of repayment, the rate of interest, the duration of loan – all these have a very important role in determining how well off the student will be after finishing the degree.

To manage all this and to give the student a hand in making wise choices, we highly recommend a financial management tool. This tool or software is available online as it is of enormous use to students in calculating the deal they have been offered. Nobody wants to leave college with a huge loan over their heads and no list of repayment options. This is where the financial management tools will be of help and guide the student into making wise and informed choices.

Thus, it is very important that for managing a student loan you have access to good financial management tools or software.

Managing Student Loan Debt Outside Of Bankruptcy

Student loan debt is becoming one of the fastest growing sources of debt among young adults today. The struggling economy has yet to provide the influx of entry-level positions graduates were promised in exchange for getting their education. With few employment options and overwhelming student loan debt, many graduates have been forced to seek debt relief solutions such as bankruptcy.

Although bankruptcy can be a great tool for debt relief in the traditional sense, it does not usually provide the opportunity to eliminate this type of debt in the process. Student loan debt is one of the most challenging debts to have discharged in bankruptcy, but that does not mean that there are no other option available for debt relief.

Loan Deferment Program

One of the easiest ways to provide temporary relief from student loan payments is to request a deferment. A student loan deferment temporarily suspends payments for a period of 6 to 12 months. In most cases, the interest associated with the loan is also suspended during the deferment period.

Qualifying for a loan deferment is as easy as contacting the lender to request the deferment. Deferments are available for financial hardships, involuntary unemployment, returning to school or starting your own business. The most important aspect of qualifying for a deferment is that you are not delinquent on your payments. Therefore, you must contact your lender to request the deferment as soon as you become concerned you may miss a payment.

Loan Forbearance Program

Similar to a loan deferment program, a loan forbearance program can also suspend your payments for a period of time. A forbearance program is typically reserved for those who have defaulted on their payments and can prove financial hardship. Although a forbearance does suspend payments for up to one year, the interest on the loan will continue to accumulate during the forbearance period.

Qualifying for a loan forbearance can be easier than a deferment as the benefits are not as great. A forbearance program can grant payment suspension for medical problems, unforeseen personal or family problems and lack of income sufficient to cover the monthly payment, which is 20% of the borrowers total monthly expenses. Since defaulting on your loan does not hinder acceptance into a forbearance program, you simply need to contact your lender to request the necessary application for the program.

Loan Consolidation Program

Repaying your debts is always the best solution in order to protect your financial future. However, there are times when you can afford to make monthly payments on the loan but not over an extended period of time. Obtaining a debt settlement or consolidation plan can be a better option to bankruptcy, in that your credit will be better off having repaid the debt rather than have it eliminated. A loan consolidation can provide you with a reduced principal amount of debt owed. In other words, you may be able to negotiate a debt settlement with your lender and repay only this amount in full before your debts are considered satisfied. It is a good idea to attempt to negotiate with your lender directly rather than use a third party debt consolidation company.

How to Manage Student Loan Debt?

Dealing with unfavorable financial conditions is not a straightforward task, and in case you happen to have serious financial problems, a bankruptcy trial lawyer could suitably assist you. This instance could occur when you are powerless to deal with your debt. This situation could also arise when you are under the pressure of a student loan debt. Investigations reveal that nearly 50% of students are powerless to repay their debts for a minimum time span of 10 years. Statistics reveal that this number is all set to escalate, with the escalating redundancy rate. In case you are by now under the influence of a loan debt, it is the precise time for you to be aware of how you can deal with it in a proper manner.

Managing your student debt is not an impossible task; however it is up to you to be conscientious in this regard. The initial step entails procuring sufficient knowledge pertaining to the loan. Establish the type of your student debt. Assess the exact amount which the loan owes to you. You could ascertain the payments which are to be made on a monthly basis. Analyze what would be the rate which you would be required to pay, on the whole and additionally on a monthly basis. After this process, you can find out if you are capable of paying the amount within the stipulated time frame or not.

If you have certain issues with the payoff, you could seek the extensive payment alternative. This would render it feasible for you to repay lesser amounts of currency which could be spread out over a longer time frame. This would ultimately lead to elevated interest rates, though this would be beneficial for you in the long run as the interest could turn out to be tax-deductible encircled by scrupulous restrictions.

You could also utilize an income-based settlement arrangement. This would assist you in lessening payment by another 15 percent of your flexible revenue and this would occur on a monthly basis. You would be able to keep yourself updated with all the current payments effortlessly. This would also lead to augmented savings which you can utilize for supplementary investments.

Alternately, you could also request for leniency or rescheduling on your student loan debt payments. This is appropriate if you are powerless to repay your debt just now. This opportunity would necessitate a distinct time span through which you could ensure that your debt is balanced. This would be quite useful in case you are undergoing a certain period of joblessness.

Initially, your student loan debt could appear to be a helping hand, which could suitably be transformed into a frightening situation if you are incapable of managing your student loan aptly from the onset. It is advisable to bear the fact in mind that when you are a student, employment prospects would not for eternity be convivial. Thus, it is essential to focus on proper management of debt, right from the onset and you would not have to face innumerable issues in the near future.