A milestone has been recorded wherein student loan debt overtook credit card debt with an expected amount of almost $1 trillion in 2011.
Numerous students in college are set to face tremendous financial problem upon graduation due to student loans. What actions should be taken by them to get out of this dilemma?
In an interview with Rebecca Jarvis, the Business and Economics Journalist of CBS News, she advised to enumerate every loan and debt that you have. Furthermore, ensure to enlist the details of each loan such as the terms of payment and the monthly interest rate to retain a good standing as a payer.
According to Jarvis, it is much preferred to make a loan consolidation in order to have a single payment for all the loans with good terms that is favorable to the graduating student. Negligence in student loan has been currently expanding in the range of 7% to 15%. Several preferences can be considered but only the standard choice is the quickest method to pay loans.
Jarvis further expounded that a standard choice offers monthly payment of at least $50 in a span of one decade. Definitely, it is the ideal choice as well as the cheapest mode for paying student loans. In addition to that, an option to lengthen the payment terms from 12 years up to three decades is readily offered for that same value under the extended repayment. In the graduated repayment, a graduate student can pay at least $25 in a month-to-month basis for similar duration. Finally, under the income-based repayment, one can pay his loans with the smallest amount of $5 monthly in a span of 25 years.
For delayed payments, Jarvis indicated that there are consequences such as withholding of Social Security checks in the years to come, withholding of tax refunds and negative reputation on credit score. Moreover, once an individual submits documents for bankruptcy, the student loans are retained.
Another reminder given by Jarvis is to advise immediately the lending firm if an individual should not be able to pay on time due to various personal financial obstacles. More importantly, the student must already pay his loans while still studying to avoid further burdens in the future.
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