Tuesday, July 20, 2010

3 Useful tips to eliminate student debt

Lately I have been receiving various e mails from students asking for advise on student loans , after thinking about it for a couple of days and undestanding the financial situation some people faces the option of going back to school after losing a job therefore incurring into more debt. In the last few years, an increasing number of students have incurred student debt. The cost of higher education has reached sky high. Sometimes, students are not able to finance their education cost through one loan. They are compelled to take multiple loans. These loans often have different payment schedule. Thereby, it becomes extremely difficult for the students to remember the due dates of all the loans. Also, when they graduate, the pressure of paying off student loan debt becomes overwhelming. However, student debt elimination is not an impossible task. Go through this article to know about some effective student debt elimination tips.

Debt Consolidation Care logo

Student debt elimination tips
The 3 smart student debt elimination tips are given below:

1. Consolidate student debt: You can opt for student debt consolidation loans. With the help of this loan, you can consolidate your multiple student debts into a single loan. You can get these loans from various lenders and financial organizations. However, the lenders are likely to charge higher interest rate on the loan if you have bad credit or poor credit score. The interest rate of these loans is generally low. This will help to reduce your monthly payments. Thereby you can have some spare cash in your hand. Also, you’ll have to make single monthly payments instead of several.

2. Make payments: If you really wish to eradicate your student debt, then you should start making payments as soon as possible. If you can afford, then you make some extra payments also. This will help you eliminate student debt quickly. Keep in mind that if you miss payments or make late payments, then your student debt load will only increase. Also, it will have a negative impact on credit score.

3. Refinance student loan debt: This is a great student debt elimination tip. You can also refinance your student loan debt. By refinancing student loan debt, you can extend the loan term and reduce your monthly payments. However, you analyze the pros and cons of refinancing before opting for it. The reason is you might end up paying more over loan term.

The last student debt elimination tip will be to opt for federal student loans. This is because the interest rate of these loans is very low.