The end of the six-months grace period on student loans is one of the most stressful and difficult time of the year for recent graduates. The amount of your debt increases your anxiety, because, naturally, the more you owe, the more you have to pay back. Experts say that there is no reason to panic – you can pay all your debts and still have money to live if you administrate your income better and chose good credit solutions.
Expert tips for saving time and money while paying for your student loans
One of the most popular solutions to cover for several student loans is a private student loan consolidation. More and more people who have important debts after graduation apply for this program, which is supported by the Government. The main advantage within it is the fact that you can get a refinancing for previous loans and stretch the period for repaying it. Also, you have a low interest rate, so the amount of money you pay back is almost equal to the one you get.
If you want to apply for this federal student loan consolidation, you should know that the application form can be sent online or in paper format. To apply, you have to make an account on the official website, create your profile, apply for federal student loan consolidation, agree with the terms and conditions, send the form and wait for the answer. You will be contacted by one of the provider’s representative who will inform you whether your application was accepted or denied.
Of course, the lender will not just give you the consolidation loan. Your application will be approved if you have a job, a stable income, a good payment history with other credits, but once you get refinancing, paying it back is a lot easier, because you only have to make one monthly payment.
Another essential step in the process of paying your student loans is to always know exactly how much you owe. In this case, you can estimate how much of your monthly income you will spend on repaying your debts. Your lender can help you, because nowadays all of them have payment management services.
The federal student loan consolidation offers young debtors the possibility to extend their repaying period, although this might not be the best option. If this is the case, the interest rate can be higher, so no money is saved.
Last, but not least, try to understand the difference between forbearance and deferment. These solutions can be applied if you are facing some problems with your payment because of unemployment or health conditions.
The deferment allows you to postpone the monthly payments without adding any extra fees or interest to your credit rating. Forbearance is another way to temporarily suspend your payments, but is more costly, because if you choose it, interest will continue to grow on both unsubsidized and subsidized loans. In addition, if interest is not paid while you’re in forbearance, it can be added to your principal balance.