Come New Year, and many have vowed to repay their loans in time and keep themselves away from the hassles of debt. Well, this is a good resolution to make! But building savings and paying off debts could not be easy as expected especially for those who have taken long duration loans. In this journey of financial settlement, there may be ups and downs and only effective planning can get you off the debt burden. Those who have taken up the resolution of paying off debt this 2018 and if these are students loans, here is your unemployed loan guide that can help you in this endeavor. According towww.forbes.com/sites/zackfriedman/2017/02/21/student-loan-debt-statistics-2017/#19376f845dab, a student loan is the second highest consumer debt category behind mortgage debt.
Tips to ride on a debt-free road
· People who are burdened by multiple debts have to organize their service providers carefully on how much they owe and the monthly payment plan along with the online site you make the payment loaded with account information for an easy transaction. Make a note of the contact information of the lender. In case of private loans, ask for your credit report to see how much you owe the lender. The service providers should have your recent contact information of the borrower to ensure that all correspondence reaches you on time like payment dues, notifications, etc.
· Look for alternative payment options if you find the monthly payment too heavy to bear. In case your loans are federally guaranteed then check out the option of income-driven repayment plan. Again depending on the monthly income and the origination of the loan you qualify for student loan caps of 10%, 15% or 20% stretched to a period of 20 or 25 years. The higher interests you pay, the longer you take to repay the loans.
· Alternative payment options are available only for federally guaranteed loans. For private loans, there is another option available for students who are struggling to make payments. Loan modifications and rate reductions are part of the deal for those struggling borrowers. Some may postpone the payments till the borrower settles in a good job.
· Having a good credit standing can qualify you for a refinancing. But remember the credit scoring has to be excellent with high-income range. Once you qualify for refinancing option, the advantages are high. Some companies help borrowers to save more on the life term of the loan.
· Always choose legitimate options to protect from debt scams. There are legitimate companies that come with financially secure repayment options for student debts. Though, there is also a sketchy player who take advantage of the desperate condition of the debtors. In exchange for the help offered they see hug fees upfront and monthly payments later. Hence, take a calculated decision.
· Let your payment be in auto debit mode. This gives student loans an option to set and forget about it. Some offer .25% interest reduction when your monthly payment is in auto debit mode.
Remember that it is not the end of the road while in debt. There are always options available to make your loan repayment easier and safe.