Student Loans and Consumer Debt Management Strategies
If you already have student loans, chances are you will want to get rid of them as quickly as possible. That said, these loans are given at a much lower interest rate than car loans and unsecured credit card accounts. In some cases, you may want to return to college and eliminate some of your high interest debt. At the same time, you will have a tremendous opportunity to begin working towards a career that will help you gain a better financial standing. While this is an unconventional consumer debt management strategy, it can work to your advantage.
One of the most important things about student loans is you will not need to worry about your credit rating. Typically, as long as you maintain a certain GPA, and take a certain number of credits per semester, you can continue taking loans. Even though your tuition must be paid first, you will receive any additional funds for living expenses. Depending on the amount you apply for, it may be possible to eliminate or at least "consolidate" a number of your smaller debts.
Unfortunately, if you have a mortgage, it is not likely that you will be able to convert it to student loan debt. Among other things, you will find that there is an aggregate limit to the amount of money that you can borrow. At the same time, your mortgage lender is not likely to allow you to make advanced payments on your principal balance. That said, if you select a degree program that will help you secure a good paying job, you will be able to reduce all of your debts much more easily.
When it comes to seeking relief from student loan debt, you will find that you are limited in your options. Among other things, even if you are successful in obtaining a favorable bankruptcy settlement, your student loans will be excluded. At the same time, if you own a home, the bank can seize it and auction it if you default on your loans. That said, as long as you are attending college, your loans will be placed in a deferment status. This means you will not have to make any payments.
As you may be aware, all consumer debt reduction solutions will put a severe strain on your budget. In many cases, you will find that the struggle to get free of debt will last for years on end. While debt management agencies frequently recommend consolidation and budgeting, you may also want to focus on finding ways to make more money. Today, getting a decent college education remains one of the most reliable methods for achieving that goal.
If you find yourself increasingly burdened with late credit card payments and car payments, it may be worth your while to return to college. Among other things, you may be eligible for student loans. While this money is supposed to be strictly used for living expenses while you are in college, the lump sum disbursements can still help you with consumer debt management strategies.
Article Title : Student Loans and Consumer Debt Management Strategies
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How EdFed Helped others!
EdFed helped me out a lot! My student loan balance was not as high as most of my friends, so I didn't even know if consolidating would be worth my time. The loan counselors at EdFed really explained the benefits of consolidating and took the time to do a comparison of my total loan costs with and without consolidating. Even though my loan balance was not large, my monthly payments were reduced by almost 50% through my EdFed loan consolidation! This provided a lot of relief. Now, I know I can make my student loan payments, and I still have plenty of money to do the things I want to. Thank you, EdFed, for walking me through this process. - Rochelle G. Chicago, IL
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Education is one of the most basic right of any human, but with the increase in prices and the costs involved in education this has made these rights turn into a privilege which very few can enjoy. Any normal person today in the whole of United States has to take an education loan at one point of time to pay for their education fees.