Student Loan Debt Consolidation Is One of 5 Payment Options

Minggu, 22 Desember 2013

By Holly Petherbridge 
Feeling overwhelmed by student loan debt? Join the masses of graduates who are juggling these payments and cost of living expenses with first year salaries. Student loan debt consolidation programs, deferment or forbearance options are some of the leading ways to handle to staggering debt demands.
Deferment is a popular option to extend the grace period before payments begin. Interest will not accrue during the deferment if you have a subsidized loan. If the loan is unsubsidized, the interest will accrue during this extension. The interest will be capitalized as it will then be added to the balance owed and that money will in turn be charged interest. Deferment is limited to up to 3 years for those who qualify. Is it a relief option or a way to accumulate more debt?
Forbearance may be an option for those who do not qualify for student loan deferment. Depending on your situation you may be eligible to make no payment or reduced ones for up to a year. Interest will accrue whether your loans are subsidized or not and it will accrue interest which will be capitalized.
Income-based repayments are a good option for those who are employed but cannot afford the full payment. Payments will go up and down with your income and could be forgiven after 10-25 years depending on the program and if you work in a qualified public service job.
Income-contingent repayment a borrower's income and family size helps to determine the amount owed. There are opportunities for loan forgiveness if working in qualified public service job.
If capitalized interest worries you or you are not employed with a qualified public service job, federal student loan debt consolidation may be the better payment option. Consolidation will combine your loans together and one easier payment will help keep your budget working more efficiently. The length of the loan may be extended, but will affordable payments, it makes paying off student loans a bit simpler. There is no capitalized interest and often times the interest can be negotiated to a lower rate.
Take care of student debt. Ignoring it will only leave you paying more in the long run. Larger payments due to accrued interest are not the best option for those struggling to pay the initial loan amount. If you are focused on paying your federal loans, you may want to use a service to maximize efforts to save. Working with the Department of Education can be very time consuming and in turn frustrating.