Consolidate Student Loans The Right Way.
The cost of getting a higher education seems to soar faster and faster each year. It has outpaced inflation for quite some time. Students and parents of students often feel have no choice but to take out substantial student loans to pay for the education of the student. They are counting on the earning power of the graduate, enhanced by a higher degree, to allow the student loan to be repaid at a later date. Unfortunately, student loan debt can rise to an unmanageable level.
Credit-yogi.com can help if you are having trouble facing the monthly payments on a student loan, your first option could be to seek forbearance or deferment. This allows you to pay back a bad credit student loan at a lower monthly rate for some period of time (forbearance) or to miss a certain number of monthly payments altogether (deferment). These may get you past the payback crisis. Then again, they may not.
There are limits as to how much forbearance or deferment you are allowed to take. When that runs out, you would most likely seek to consolidate the student loans.Seeking such consolidation has many advantages. It can combine the frustrating monthly payments to multiple creditors and results in one monthly payment. Furthermore, this payment could be negotiated at a lower interest rate than the outstanding loans, saving you money in the long run.
A good place to begin is with the Federal Direct Consolidation Loans program. They will allow you to consolidate almost any federally insured loan or loans. They will not deal with any loans that are not federally insured, for example state loans and private loans. There are a couple of things to keep in mind should you choose to enter this process to handle bad credit student loans:
- Find out what your new interest rate would be. This will allow you to figure a monthly payment that should be lower than the payments to various creditors combined. Keep in mind that the different creditors all have different interest rates, and you must also take this into account.
- Like a home loan, you must determine a payback life of the loan. This will also need to be taken into account when you calculate whether or not you will be saving money in the long run. There is no set limit on the amount of the loan or the life of the loan, so negotiate for your best possible outcome.
- The initial consultation is free.
Credit-yogi wants you to know that there are even more advantages to be had from a good student loan consolidation. You may be able to qualify for renewed deferment options. This would renew your ability to take deferments on monthly payments even if you have already used up the deferments under the old loans. Also, you will have a choice of multiple payment options. Some of these such as the Income Based Repayment Plan and the Income Contingent Repayment would adjust your monthly payments if you can show that your financial situation has changed during the life of the loan. You may also switch back and forth with an unusual freedom between payments plans at your discretion.
If the student is still in school, these plans are normally not available. However, they are granted in some special circumstances. There are some things to beware of. If your school loan is defaulted, you must make satisfactory repayment arrangements, which credit-yogi.com can help you do, with the creditor before getting a consolidation loan for student loan debt. Also, keep in mind that if you are relatively close to having the loan repaid anyway, you are probably causing more trouble than it is worth to try to consolidate the remainder of the loan.