How to Deal with Outstanding Student Loans

Student loan debt is so bad that it’s now considered a crisis, with over $1.5 trillion owed among 44 million borrowers in the U.S. alone. These astronomical numbers are second only to mortgage debt and a number of students are suffering with the burden of paying off student loans well into adulthood.

People who graduate with student loans are often trapped in a vicious cycle of constantly being in debt because of an inability to keep up with payments. Even if a student manages to find a job right after graduating, the income alone is often not enough to keep up with student debt as well as the standard cost of living (especially when rent is high). In turn, young adults resort to relying on credit cards to pay for basic things like food, transportation, internet, etc., pushing them even further into debt.

Student loan

So what can be done to offset the burden of student loans? While there are options out there, you’re going to have to do a little leg work to find them.

Debt Consolidation

Instead of paying off all of your loans from multiple creditors and at different interest rates, you can consolidate your debt into one single monthly payment. The Credit Canada debt consolidation program is a great option for people who need a helping hand when it comes to managing their bills and money.

You’ll work with a certified Credit Counsellor who can combine all of your unsecured debt into one monthly payment. They will also negotiate with your creditors on your behalf to either stop or lower the  interest on your debt. From there, they will work with you to create a plan with a specific end date as to when you will pay off everything you owe.

The goal is to create a repayment plan where you pay off your debt rather than just paying the interest on your debt. With a lower or zero-percent interest rate on your debt moving forward, every payment you make goes towards paying down the principle rather than just covering the interest. This is extremely helpful for people who have more than just student loans to deal with because managing other debts can make paying off your student loan much easier and more manageable.

Budgeting

A number of students are familiar with living on a budget, and it’s something that many adults are going to have to keep up with if they want to pay off their debts. There are a number of useful tools out there for building a budget that works for you, but the most important factor is that you stick with it. Easier said than done, but a budget is the number one way to pay off your debt and secure money for yourself in the future.

Hold off On Major Life Changes

While it’s not something anyone wants to hear, a number of young adults are holding off on major life events like getting married or buying a home in order to save money. With the average cost of getting married sitting at over $30,000, it’s no wonder that couples hold off from tying the knot. Buying a home and settling down to have children is even more expensive, so it’s best that you have your debts in order before even thinking about making these huge financial commitments.

Despite the grim picture, there’s light at the end of the tunnel. Keep working towards your goals and you’ll eventually get there.

3 Best Debt Consolidation Loans of 2019

Debt consolidation means to pay off your existing loans by taking one single loan which suits your requirements. It is the best way to streamline the entire repayment process.

Lower interest rates and a low monthly installment are two of the biggest why people opt for a debt consolidation loan. You have a higher chance of getting your debt consolidation loan approved if you have sufficient assets that you can let the lender use as collateral against the loan. This is known as a Secured Loan as the lender has an option to recover money if you fail to repay.

consolidation loan

But with Unsecured debt consolidation loan, the lender has to take a risk by lending you money. If you fail to repay, suing you is the only option the lender is left with. Hence, this loan has a high-interest rate and are difficult to get approved unless you demonstrate a steady flow of income.

Here are the 3 best debt consolidation loans 2019

1. Lending Club

Get your life back on track by applying for a debt consolidation loan online with Lending Club. Lending Club is known for it’d credit card debt consolidation plans which allow users to clear their debt by paying a fixed monthly rate.

Applying for a debt consolidation loan with Lending Club is easy and hassle-free. Apply for a loan online by giving some basic information like the amount you are looking to borrow, your name, address, etc. Once you are done with this, you will get plenty of plans to choose from. Your money gets deposited in your bank account without having to do anything else.

2. Marcus by Goldman Sachs

Debt consolidation loan by Marcus might be the best option for you have a good credit score(above 660) and want a flexible loan term. Marcus is a brand of Goldman Sachs which is headquartered in Salt Lake City.

They lend anything between $3,500 – $40,000 with an APR of 5.99% – 28.99%. Similar to Lending Club, Marcus also deposits the money in your bank account within 1-4 business days(from approval date). They do conduct a soft credit check with credit bureaus like TransUnion to verify your credit score and check your credit history. 

3. OneMain financial

OneMain Financial is a lender headquartered in Pennsylvania. Like Lending Club, OneMain Financial also provides a fixed interest rate, one monthly payment and an option to roll all the debts into one single unit.

To get approved for a debt consolidation loan with OneMain Financial, you need a copy of a valid, government-issued ID, proof of residency and proof of income. You can also ask for a lower monthly payment which they will approve after careful evaluation of your credit score, credit history, income details, etc.

Summary

To reiterate, a lowered interest rate and one fixed monthly payment(which does not change with time) are two of the biggest benefits of applying for a debt consolidation loan. “No matter how small or large the principal loan amount is, you are expected to pay off the entire debt within 3-4 years,” says Harrine Freeman, best-selling author of How to Get out of Debt: Get An “A” Credit Rating for Free.

How to Repay a Debt on your Own?

In order to repay a debt, one needs to make an arrangement, and that has to be executed as planned. It is essential you’ll have to make every single vital adjustment to your financial plan so you don’t overspend. An emergency fund account has to be created and the amount has to be transferred to that account every now and then.

Make it your objective to make a checklist and mark an assignment of the rundown every day (or every week), contingent upon how rapidly you need to progress toward becoming debt free. On the off chance that you need to do this perfectly, you need to ensure that you know where you spend every penny.

repay a debt on your own

Always keep an expense sheet, when you can update the expenditure. Make a list of all the debts, the details of the creditor, amount of the Debt, and due date, etc. Always confirm the debts with a credit report. Keeping track of all these details will keep you alert and help you in working out with clearing the debts. Make sure that all the debts are paid off on time. Because if the payment is done after the due date, there would be another additional expense, the Late fee, which would be another burden. Also if you keep missing the due dates consistently, interest rates and finance charges will increase.

Always use a calendaring system on your computer or smartphone, enter your payments there and set reminders several days before your payment is due and also on the date it is due. Never miss a payment, but if you do, don’t wait until the next due date, make the payment as soon as you remember or otherwise it will be reported to the credit bureau.

repay a debt on your own

Don’t just create your list and forget about it. Refer to your debt list periodically, especially as you pay bills. Update your list every few months as the number of your debt changes.  Keep checking them regularly and make sure no amount is spent unnecessarily. Get your free yearly credit reports to check them for exactness and to distinguish all debts.

Having everything worked out before you are extremely the way to progress here. Besides, when you’ve worked it full scale, and it’s in that spot in highly contrasting, it may not appear as outlandish as it did previously. Make a rundown of the details of your debts name of leaser, loan cost, balance, etc. Paying high financing costs on existing loans makes your debt truly mount, and makes paying it off considerably more troublesome. In order to bring down the loan charges. This is what to do:

  • In view of your credit, you may meet all requirements for much better loan costs on Mastercards.
  • Open a free record with Credit.com and see what sort of low rate balance exchange Visas you can get.
  • Call your card guarantors to request lower rates on Visas.

Make a minimum payment, if you can’t pay the whole amount. This way, you can keep your debt from growing and your account will in good standing. Credit Card debts should be paid off first. This is the best kind of strategy as the other debt may not have an interest as higher as a credit card.

Also Read- 3 Stages of Retirement Planning for Entrepreneurs

See which costs can be removed from your financial plan. In the event that you eat out various times each week, check whether you can chop it down to just once per week. Mechanize your investment funds. Check whether your boss will give you a chance to contribute some portion of your check to a bank account. The perfect sum is 10% to 20%, however, in case you’re endeavoring to escape debt, this probably won’t be conceivable. Check whether you can begin with 5% every check.

In the event that you can’t mechanize your reserve funds from your check, have your investment funds computerized from your financial records every payday. That way, you don’t coincidentally spend this cash and you won’t miss it. On the off chance that you get a reward or a salary increase, check whether you can stand to contribute a portion of that cash to other accounts.

As you work this framework, remember that it is going to be difficult. Getting rid of the debt takes a lot of work, yet in the event that you really need to clear all of it, it should be your diligence that can get it going. Furthermore, don’t worry about the modifications you might make in your framework. There is never a fixed solution, it’s always tied in with changing your propensities and practices so you can accomplish your financial objectives.

Handling the Dilemma of Repaying your College Debt – Tips & Advices for Students

Student debt

It is rather tough to deal with student loan debt, given the way it is ballooning out of control. Being a student, you must have been acclimatised with the student loan debt crisis that the nation is going through. Americans are recorded to owe a staggering $1.4 trillion in the form of student loan debt and this debt is more than all the car loan and credit card debt combined. 8 among 10 college students left colleges in 2017 with an average of $38,176 as student loan debt. In fact, as per reports from Federal Reserve Board Survey of Consumer Finances, around 20% borrowers owe more than $50,000.

There are many students for whom it is necessary to take out student loans as they don’t have the financial capability of funding their college and high school life. Whichever may be the cause, student loan debt is leaving the graduates in a state of mess and are forcing them drown in debt. What are the solutions? Is it possible to seek help of Northcash loans or other companies and trigger off your debt? Here are few suggestions from the experts.

Advice #1: Leverage the grace period of your loan

Based on the type of loan you have, your lender might offer you a grace period post graduation where you don’t require making any kinds of payments for the loan. During this time, avert the option of ignoring your debt. In case you’re blessed with the grace period, this is the right time to get a clear comprehension of the loans, set a definite game plan and then begin making payments.

Advice #2: Get to know your loans better

Even though you have crossed your grace period long back, the first step in dealing with student loans is to understand what kind of a loan you’re dealing with. You will find it easier to turn off your brain, continue with the minimum monthly installments and not give it any second thought. However, if you wish to make an impact, you should know the way in which the loan works.

Advice #3: Select the best plan for repayment

You could always have the option of selecting a better plan for payment like the Income Based Repayment Plan or the Pay as you Earn repayment plan. Such plans give you the discretion of making affordable monthly payments based on the income that you make in a month. You can also seek help of student loan consolidation in case you have difficulty in tracking your multiple loans.

Advice #4: Stick to a strict budget

Once you’re sure about the monthly payments that you have to make, you should instantly create a budget for the entire month. While devising the budget, trim anything that you can so that you could put more money towards the debt. Find out new ways of saving money.

So, if you don’t want to be caught within the trap of student loan debt which keeps soaring out of control with every passing day, make sure you follow the above mentioned advices shared by financial experts.

Your Debt Repayment Timeline: What to Pay When

It is important to create a repayment plan when tackling debt. When deciding which debts to pay and when, you will want to consider the payment amount, the length of the loan term, and the current interest rate.

Credit Cards

Debt repayment

Image via Flickr by ccPixs.com

Most households have some type of credit card debt spread among numerous credit cards. In fact, American credit card debt has reached an astounding one trillion dollars in 2017. When you owe to multiple credit cards each month, creating a repayment plan can feel overwhelming. When it comes to paying down credit card debt, you can organize your debt either by amount owed or by the current interest rate.

Organizing credit cards by the amount owed allows you to pay off larger debts first. These are the credit cards with higher monthly payments. You can also choose to start at the lowest amounts owed, giving you a sense of success upon quickly paying off lower credit cards. Organizing credit card debt by interest rate can save you money in the long run by avoiding costly fees. This will lead to the lowest amount paid over the life of the credit card.

Student Loans

Shortly after college graduation, you will begin receiving student loan bills. Depending on the amount owed, monthly student loan bills can be quite high. Instead of ignoring them, gain control of your student loans by consolidating or refinancing them. Consolidating your student loans combines them into one monthly payment that is easier to track. If you have good credit, you might even qualify for a more affordable monthly payment with a lower interest rate.

Mortgages

Many homeowners wonder if they should prioritize paying down their mortgage over other types of debt. A mortgage is considered good debt. This means that it is a debt that offers a return on the investment. Mortgages represent one of the longest loan terms and also one of the biggest purchases you will make. As long as you keep up with your monthly mortgage payments, it is unlikely to hurt your credit. The interest rate on your mortgage is also likely to be less than your credit cards. While your lender may offer the option to pay ahead on your mortgage principal, consider allocating extra cash to high-interest debts like credit cards and personal loans first.

Auto Loans

Auto loans are fairly easy to get but often come with higher interest rates. Paying off an auto loan early can free up monthly cash flow, but it is best to tackle even higher-interest payments first. Refinancing your car loan is another option if you qualify for a lower interest rate. Maintaining a responsible payment schedule on auto loans can boost your credit score.

Personal Loans

Personal loans come with higher interest rates and shorter repayment terms. Defaulting on a personal loan can also severely affect your credit and your ability to take out future loans for a mortgage or student loan. Because of the financial effects of personal loans, they should usually be paid off sooner.

Eliminating debt requires you to organize and evaluate your debt repayments. Considering term length, type of credit, and interest rate can help you get a better grasp on your debt.

Put Your Knowledge of Debt Reduction Strategies to the Test

Debt reduction

As a loyal reader of Frugal Rules, you should know something about attacking and eliminating debt. Care to put your knowledge to the test? Health IQ’s Debt: Snowball or Avalanche? quiz checks how much you understand about debt reduction strategies, especially the snowball and avalanche methods.

Do you know the fastest way to pay down your debts? What about the debt reduction method that attracts the least interest? Did you know that sometimes debt reduction strategies don’t attract any interest at all? Taking the quiz is a great way to test what you know about reducing your debt and learn what you don’t. With only 10 multiple choice questions, you can take the quiz over your coffee break. Health IQ provides instant feedback on your answers so that you’ll know why you were right or wrong while you learn more about the snowball and avalanche methods.

Since nothing is wrong with a little healthy competition, Health IQ tells you what percentage of Americans answered each question correctly. Once you complete the quiz, you can check how your score compares to your friends and other people in your area on the Health IQ leaderboard. Taking the quiz isn’t only a great opportunity for learning; it’s also an opportunity for earning. You’ll earn Elite points for every right answer, redeemable for prizes such as donations to your favorite charities and tickets to sporting events. What are you waiting for? Take the quiz, Debt: Snowball or Avalanche? and start earning Elite points.

 

Health IQ: Quizzes, Tips, and Insurance>Life Insurance Claims>Quiz>Debt: Snowball or Avalanche