Don’t let the burden of student loan debt confuse; Know the repayment options
Student loan debt is the next bubble that is going to cripple the entire economy and if you’re someone who is already spending sleepless nights wondering about your soaring debt level, you need not fret as there are hundreds of people who are accompanying you. With the drastic rise in education costs and tuition fees, not many students and parents are being able to save enough funds with which they can repay their debt obligations and also have enough money for their child’s college fees. It is then that they take resort to student loans, most often federal student loans as they offer lower rates than their private counterparts.
However, taking out too many federal loans will http://www.andtravelinsurance.com/ also lead to the federal debt and you might then have to desperately look for debt consolidation options. You’ll be rather happy to know that federal loans can be consolidated through the debt consolidation loan. Here are some benefits that you may reap through the student debt consolidation loan.
You have to write a single check: If you’ve become tired of writing multiple checks to multiple creditors, you can change this entire debt repayment schedule through a debt consolidation loan. Since you’ll take out the loan from the US Department of Education, you have to write a single check to the institution. Instead of writing multiple checks, you just have to write a check to them and this will relieve you of all the hassles of remembering multiple due dates.
Revised interest rates: The interest rates of the loans are often the biggest reason behind the defaults and the debt consolidation loan will carry drastically lower rates than what you’re paying on the individual loans. The revised rates will also mean revised monthly payments and therefore you can easily be able to save a considerable amount of money every month.
Various repayment plans: The repayment plans of the debt consolidation loan will also be different from that of what you were paying on the student loans. The most common repayment plans are Income Based Repayment Plans and Income Contingent Repayment plans. You will also be given the chance to switch from one repayment plan to another according to your changing financial needs.
No minimum amount for qualification: You don’t require any minimum or maximum amount to qualify for the loan. If you check out the loan options of traditional debt consolidation loans, there is a fixed amount that you need to owe before you get the loan. But this is not the case with the direct debt consolidation loan as you can get the loan with whatever amount you owe.
So, if you don’t want to contribute further to the student loan debt bubble, take the above-mentioned steps to combine your debts and repay them. Follow a budget, save money and also curb your credit card usage so that you don’t incur further debt while you’re already behind on your student loans. To know more on debt repayment.