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Student Loan Consolidation and Other Options

I know your concern is to keep from defaulting on your student loans and that's good because not taking care of the financial aspect of your life will cost you in the long run. Student loan consolidation might be the answer to your problem or just an alernativce so let's find out what's best for you.

What does it mean to default on your loan?

Basically it means that you haven't made payments for your student loan for at least 270 days. The bad thing about this is that you basically broke your agreement with your lender and in turn they can request that you immediately repay them. The first thing to do if you can't handle the payments is to communicate that to the lender and try to work something out before the situation gets worse than it should.

They might advise you to go with a student loan consolidation or even work with your situation themselves. It never hurts to communicate and it's much better than just avoiding the issue. For in-depth, personal advice you can visit TG for assistance on student loan consolidation or call them at (800)338-4752.

Payment Options

When looking at your options to pay for student loans it's best to consult with the people at TG to get the best information because each case differs so make sure you call them and ask if student loan consolidation is for you.

Standard Repayment Plan . This plan has the lowest total interests. This plan includes a ten year term repayment, regular payments of principal and interests must be paid monthly excluding deferments and forbearance. The minumum monthly payment is $50 or the interest accrued (which ever one is larger and it's based on the total amount of the loan.)

Extended Repayment Plan . This plan will lengthen your payment term to 25 years and payments can be fixed or graduated. With this plan you will pay more interest than with the standard repayment plan and a minimum balance of $30,000 to qualify.

Graduated Repayment Plan . This plan offers smaller payments at the beginning of the payment turn and then gradually increases over time. It offers a ten year repayment plan but it will cost you more in interest than the standard payment plan.

Student Loan Consolidation . This plan allows you to combine several federal education loans into a single loan. It will make it simpler because it will make it into a single payment if you have multiple loans. It also allows you to extend the repayment period but it will cost you more in interests than the standard plan.

Income Sensitive Repayment Plan . With this plan, you must reapply annually and the monthly payment varies according to your gross monthly income along with monthly accruing interests. But it the interest will be more than the standard plan.

Forbearance .Lenders can offer you reduced payments, extended time to pay the student loans, or may give you a break from makning payments due to an extreme financial problem or medical problem. You will have to talk to your lender about this.

Deferment . When you meet certain criteria you will be allowed to postpone your payments because of unemployment, some economic crisis or if you enroll in school. Your lender will decide whether you qualify for this. Click here to dowload the forms to apply for forbearance.

What You Should Avoid!

One of the things you should avoid is delinquency which just means that you need to avoid late payments. A payment is late when the lender does not receive the payment one day after the payment is due. Sometimes you can be charged late fees and at worst they won't let you borrow money in the future. If you can't make the payment consider student loan consolidation.

Defaulting on your loan could cost you a lot in the short and the long term so here is a list of reasons why you shouldn't default on any student loan.

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What to Do if You Already Defaulted.

Reinstate your federal financial aid by making six consecutive full payments to the lenders. This will allow you to get the student aid.

You can also go with a student loan consolidation which will make your payments one lump sum as well as giving you an extended period to pay for your loans.

You can also rehabilitate your defaulted loans by making nine consecutive monthly payments to the holder of your defaulted loans. Make sure you try and solve your financial problem because it affects your life as a whole.

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