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Reducing Student Loan Debt
Student loan debt can haunt a person for years even after he/she gets out of college. So reducing the debt may come as a considerable relief.
How to reduce student loan debt
No one in the right frame of mind will like to spend years in paying off debts he/she incurred while in college. Naturally, any person will try to reduce the student loan debt as far as possible in quick time so that he/she can have more freedom to enjoy his/her life after college. There are a number of ways in which one can reduce his/her student loan debt depending on one’s specific requirements. In fact, the best way out is to avoid a student loan altogether. This should be the last option after all other avenues for getting free money for education are exhausted. However, if a student loan becomes unavoidable, here are a few tips for reducing the burden.
Make timely payments, explore various options
For better management of your student loan debt, try to make all payments on time. In case you miss a payment, you stand to repay a bigger amount because of increased interest rates. If you raise your monthly repayment, it will shorten the duration of your loan by and save you some money in the long run. If you have problems remembering to make monthly payments, you can choose an automatic payment option through the bank to make sure that your payments are made each month on time. You should also seek suggestion from your lender on it is possible to adjust your monthly payments in accordance with your income. You can choose from the options of refinancing or consolidating your loans to reduce your monthly payments.
Loan consolidation means consolidating all your loans into a single larger loan. It can help by either extending the life of your loan or by giving you a fixed, lower rate of interest. If you go for a lower interest rate, it will save you money on your monthly as well as over the long-term repayment of your loan. Moreover, you’ll have to make a single payment instead of many. Loan consolidation is an effective way to reduce and pay off student loan debt. You should carefully follow the eligibility criteria for student loan consolidation, which are different for different lenders. Only a private consolidation loan can roll your federal and private student loans together. In such a case, however, you lose the financial benefits that come with federal loans. It is better to consolidate your federal loans first and then try for private consolidation.
A loan forgiveness program will allow you to cancel your entire student loan debt or part of it in lieu of a specific period of service. To be qualified for loan forgiveness, you should typically start teaching or providing legal aid and health care in select communities, volunteering or military service. The loan amount will depend on the organization as well as the amount of time that you serve.