How To Handle Student Loans Without Going Insane

How To Handle Student Loans Without Going Insane

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So you just graduated and got that first bill saying you owe money for your student loans, huh? Or have you begun paying them, but keep thinking there must be a better way. Here are a few tips and tricks to paying back your federal student loans without going crazy.

The first and the easiest step for this is to opt for Installment Loans that way students can pay off their debts in small affordable installments. This is the most logical and efficient way for students to pay off their debts and continue their studies without any financial burden.

With federal loans, if you’re enrolled in school at least halftime, your loans are ALWAYS eligible for educational deferment. That means you aren’t required to pay back your federal student loans while you’re attending school. This can include any type of school, so whether you’re getting an MBA, Doctorate, Graduate Degree, Etc. you don’t have to pay it back yet.

Federal loans offer a variety of ways to forbearance, although a forbearance will still rack up interest payments (where a deferment won’t get any interest charges.) Every month, you’ll be charged interest plus a principal charge for a total amount billed each month. A loan in forbearance will be charged the total bill for the month, but that charge goes to the back of the overall loan amount, so you aren’t paying it back yet, but by the time the entire loan is paid off, you will have paid all those interest charges.

If the payments are too high for you to handle, you can lower the monthly payment on your student loans. There are many different payment options set up through the Department of Education. Most of the repayment options will be almost equal to the amount of the interest accrual every month.

Lower payment options can be applied and removed multiple times, and there is no limit to how many times the loan payment is changed throughout the span of the loan. This is great for people in between loans, or people who do seasonal work, like contractors or construction, and have less projects in winter months.

A lot of companies won’t hesitate to default the loans, or give a negative credit report if the loans aren’t paid on time. If you allow a loan to be defaulted, the company that issued the loan will come after you in search of the full amount. If you don’t pay a $50 monthly fee on a $5,000 loan and the loan defaults, the company will expect that $5,000. Some consequences for defaulting student loans are bad credit rating, wage garnishment, I9 credit reporting which won’t away and WILL prevent you from buying a house, renting an apartment, getting a car, even some jobs.

That being said, if you can’t make the payments, it is your responsibility to call the company issuing the loan as soon you can to prevent the loan from becoming past due. Most times, companies will discuss other options to help you out. Paying a portion, or the majority will be much better than simply not paying it. Sometimes proof that you’re working to make payments will stop the company from defaulting your student loan.