Do you have a student loan? You are not alone. Thousands of people owe millions of money in student loans. Paying off this loan and dealing with the technicalities that come with it can be hard and frustrating for many people. Here are some of the common student loan problems faced and how to effectively deal with them.
1. High monthly payments
The major problem that most people are facing is being unable to repay their loans because the monthly repayment amounts are too high. A lot of people who are just fresh out of college do not have well paying jobs. This means that they will struggle to raise the amount required to pay off this loan.
If this is the major problem that you are facing, consider going for an income based repayment plan. A lot of people do not know about this but it is a government supported initiative for those who have federal loans.
Under this program, the amount of money that is directed towards your federal loan repayments should not exceed 15% of your total income. This should give you some debt relief if you are not earning a lot of money.
Just keep in mind that reducing the amount of money you are spending on your loan repayment will mean that your debt repayment period will be longer.
Even though this program is only applicable to federal loans, if you have private student loans, consider talking to your debtor and asking them to lower your monthly payment amounts to a figure that you are comfortable with. This will reduce chances of you not paying your loans in time.
2. Getting too many student loans bills
If you have multiple loans, you may be getting over 20 student mails every month. All these envelopes will be talking about your various loans. It may get quite overwhelming to keep up with all this information and know the statuses of your loans.
If you are confused and you no longer know what to do to keep your debt under control or you are unable to work out repayment plans for all your debt, the best thing to do would be to go for debt consolidation.
Under debt consolidation, everything will be streamlined and simplified for you. You will just have to pay attention to clearing one major debt instead of a lot of small debts.
3. Defaulting on your payments
Sometimes you may have cash flow issues and be unable to meet your monthly student loan obligations. When this happens, you will be slapped with penalties for every month that you default. This can result in you getting a bad credit rating.
To avoid defaulting on your payments, consider consolidating all your loans so as to work out a good repayment plan for your debt. A debt consolidation company will help get you avoid defaulting on your payments so that you can start repaying your loans again and get out of debt.