Article by Amy LewisFreelance Debt Consolidation Blogger
After the recent financial upheaval, the cost of education has been rising so high that it’s almost impossible for families to manage the excessive costs. In such situations, more and more individuals are taking out student loans to pay for tuition fees, but when the time comes to pay the loans back, they default on the debt. Defaulting on student loans is not at all desirable since it affects the credit score as well as credit history. There are many ways to eradicate the defaulted student loan debt.
One option is debt consolidation. So seek debt consolidation help from a company and pay off the defaulted student loan debt fast. Aside from this, there are some other repayment alternatives available to help you pay off your existing defaulted debt. So let us take a look at how you can take advantage of those repayment options.
• Make sure you have a concrete financial plan in mind. If your loan is in a good credit
standing or if you have not gone into the repayment period yet, then it would be ideal for you
to decide on student loan repayment options.
• When you look for a repayment option, make sure you look for one that reflects your fiscal
situation. You may also have a combination of circumstances, so once you contact an advisor ask them about the best options available for getting out of default. However, when you discuss repayment options, make sure they have comprehensive knowledge and can assist you with a repayment plan that suits your individual needs.
Suppose you have low income and high student loans, ask for the Income Based Repayment (IBR) program. Like the IBR, there are many other programs especially designed for your unique financial situation.
• In many cases, people have more than one defaulted student loans because the loans get sold and transferred to different credit collection agencies. So find out the number of defaulted student loans you have as well as the kind of loans. For example, you may have a defaulted student loan worth of $10,000 which actually is a total sum of one to five different student loans.
Along with the sum and the type of defaulted student loans owed, you also need to determine the status of all your student loans and the holder of the loans. Do not assume that since one collection agency is contacting you, you have only one defaulted loan. Visit the website of National Student Loan Data System (NSLDS) and find out all the student loans owed.
• Once you default on your loan the total balance on the debt immediately becomes due,
resulting in the garnishing of wages and tax returns. So unless you have enough money to
pay the loan back, your repayment process will be long and hard.
Conduct research on the above mentioned options and other available alternatives to find the right student loan repayment plan for you.