Student loans repayment can sometimes represent the first bills that get ignored during a financial hardship. This is a bad idea.
Defaulting on a student loan can damage your personal credit rating and student loans cannot be discharged in a bankruptcy. Additionally, a default on a student loan can bar you from getting other federally guaranteed loans like FHA or VA mortgages. You can also have tax refunds garnished to pay your loans. Student loans repayment does not have to be a struggle. There are several options available for you.
If you are having trouble with student loans repayment it is always a good idea to contact your lender. There are several student loans repayment plans available. If you qualify, your loan payments can be adjusted, based on your income. Sometimes this will extend the length of your loan but it prevents you from defaulting.
Sometimes a lower payment is still not a relief. In this case, you might qualify for a forebearance. A forebearance is a temporary suspension of your payments. Forebearances are available for a variety of reasons incuding financial hardship, medical hardship or unemployment. A forebearance is very simple and requires you to fill out a short form requesting the suspension of your payments.
Another option, if you have more than one student loan, is to request a direct loan consolidation. By consolidating, your student loans repayment can be stretched out over 30 years. This reduces the amount of your monthly payments. It also makes it easier to manage as you will have only one payment to make after the consolidation. Not all loans can be consolidated but it is worth investigating. The consolidation loans are made through the Department of Education so the credit standards are usually very liberal.
If you are willing to perform volunteer work, serve in the military, teach or practice certain types of medicine you may even have the chance to have some or all of your loan debts forgiven. Not all loans are eligible so check out with your loan servicing company. Both Americorps and the Peace Corps have loan forgiveness programs so you might want to look at them first.
Student loans repayment can sometimes put a strain on your finances. The important thing to remember is that there are numerous programs which can help you make your payments affordable. Talk to your loan servicing company before you skip payments. This will protect your credit and your ability to qualify for other federal loans in the future.
