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Article Series: Debt
Relief & Debt Consolidation
I Want To Get Rid
Of My Debt...NOW!
Consolidating
Your Student Loans
When
you went to college you probably worried very little about
how to pay for it. After all, it was so easy!
All you needed to do was to go down to the office of the financial
aid counselor with your tax return and some pay stubs, and
after some preliminary number crunching the helpful counselor
would invite you back into her or his office and ask you to
just “sign here.” Depending on how long you were in school,
you may have had to repeat this procedure a few times, but
every time it was just as easy.
Perhaps after graduation from college you decided to continue
with your schooling and get a graduate degree. Once again you
made the trip to the financial aid counselor and once again
all you needed to do was to sign on the dotted line to make
all financial obstacles go away. While this is a great way
of making an education available to everyone who wants it,
it is also a not so great way to rack up a large amount of
student loans that will come due the moment you graduate from
college or university.
It
is not unusual to have new graduates fresh out of school
without a job yet who find themselves inundated with a large
number of small and large loan bills every month. If you financed
your education for four or six years, the odds are pretty good
that you will probably have about six to ten student loan payments
that will come due once you are out of school. While the individual
amounts are not too high, the accumulated debt might be more
than you can handle, especially if you do not have a high paying
job lined up right after graduation.
For
this reason, one of your smartest moves might be a student
loan consolidation. Such a consolidation is usually done with
a student loan lender. The goal is to take out one new loan
that will pay off all the other loans. This may significantly
lower your monthly student loan expenditures. Here are some
things to keep in mind when consolidating student loans:
The interest rate of your consolidation loan should not be
higher than the median interest rate of all of your outstanding
student loans combined. It may pay to shop around and see what
different lenders have to offer!
Wait with consolidating until you have bills and statements
for all of your outstanding student loans. If you get the ball
rolling too early, you may miss a few loans where lenders may
not yet have sent you the information. You may not be able
to later on include these loans into your consolidation loan.
Read
the fine print of the consolidation loan very
carefully. Usually the rules for obtaining a forbearance
or deferment
of payments may be a lot stricter than with the individual
student loan lenders. After all, the goal is to ensure financial
liquidity, and if you are not able to maneuver your debt in
such a way as to help you repay it in a way that you can afford,
you might soon find yourself screwed.
If both you and your spouse have outstanding student loans,
you will be able to consolidate them together! This may be
a great way of freeing up some family money. On the other hand,
if your spouse is returning to school but you are not, you
will most likely not be able to defer the payments of the consolidation
loan, since both parties would have to be in school to do so.
Again, check the fine print and find out exactly what the rules
are before you both sign on the dotted line!
Student loans can be very smart moves to help the monthly
budget get a huge boost. It is best to consolidate once you
are ready to leave school behind and get out there and find
a good paying job. If you are still not sure about what you
will do, or if you are considering going back to school, you
may wish to put your student loans on hold by taking at least
half a class load. Granted, this will rack up more interest
on your loans, but it will also prevent you from making financial
mistakes that can take twenty to thirty years to pay off!
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by SolveYourProblem.com
: 2007
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