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Paying Back Student Loans

Student loan debt can be crippling unless you handle it the right way. If you understand your situation and know what to do, you can eliminate your debt sooner and live more comfortably without that monkey on your back.

Here’s how you can achieve this:

  • Be willing to sacrifice

Getting out of debt requires discipline. You must be willing to adjust your lifestyle to make your financial goals happen. This means evaluating and eliminating certain spending behaviors until you’re debt-free. To do this, make a budget and look for items you can eliminate. Generally, this means you will have to reduce the number of times you eat out, limit vacations and time away from work, buy clothes only when you absolutely need to and postpone buying that brand new TV or Smart Phone. While it may be hard to do at times, realize that the sacrifice you put in today will pay off big in the future.

  • Find creative ways to make more cash

One of the best ways to pay off student loan debt is to find additional sources of cash. While the economy continues to be flat, there are opportunities to make money. For starters, you can use websites like Craigslist or eBay to sell old clothes or items you don’t use. Further, you can take on small, on-the-side jobs like doing yard work, cleaning homes, or babysitting. Lastly, you could find a part-time job delivering pizzas. Ultimately, no matter how you make it happen, your hard work will pay off as you are taking the steps necessary to become debt-free quicker.

  • Pay off private loans first

Private loans tend to have higher interest rates. Many times, these rates are variable rates, meaning they may increase in a few years. You want to pay off these private loans before the interest rates increase, adding onto the already large balance, making it difficult to pay the bill.

  • Know your options

There may come a time where you suffer a hardship and will need assistance. When you encounter this, call your lender and inform them of your situation. They have options available for borrowers, which includes a temporary forbearance in some instances, which allows you to hold off making payments for a set period of time. You may also want to look into debt consolidation to reduce monthly bills. Further, with the Income-Based Repayment Plan, you only have to make payments up to 15 percent of your pay. To take advantage of these programs, it’s imperative that you communicate with your lenders. They only want to help you. If you don’t keep them updated, you can miss out on options that may be available to you.

Paying off student loan debt may seem like a colossal task, but with proper planning, hard work and sacrifice, you can make it happen. By following these steps and evaluating your finances regularly, you can find ways to cut costs and pay down these bills quicker. In turn, you can gain confidence in knowing that these small steps now will lead to a debt-free future.

Jeffery Sterner writes and blogs about personal financial well-being and issues that influence it for Debt.org, America’s Debt Help Organization.

Say Goodbye to Debt

Anyone who is in debt knows that it’s a depressing place to be. Debt can cause sleepless nights, feelings of guilt and stress.

The more you owe, the worse those feelings will be, and the longer you remain in debt the more the interest mounts up on those individual debts – be they credit or store card debts, overdraft debts or other debts such as non-payment of council tax and household bills.

 

Say goodbye to debt - money worries image
Money worries – dealing with debt

Debt can begin to feel insurmountable, but there is always a way out of debt. Depending on your personal circumstances, there will be different options available to you. You may be able to structure your household budget so that your outgoings stay below your income, and any excess you have left over, you use to gradually pay back the money you owe. But if you feel that you will never get on top of your debt situation, then it may be best to seek expert financial advice from a debt management company.

Depending on the level of debt, it may be suggested that you work to a debt management plan or take out a debt consolidation loan.

A debt management plan is where the debt management company deals with your various creditors and negotiates repayments on your behalf. The company charges you a fee to do this, but it can take a lot of the stress out of your debt situation, as you won’t have to deal with the individual creditors directly and you only need to make one monthly payment to the debt management company which then redistributes that payment among your creditors. Creditors are usually willing to work with debt management companies as it is more likely that they will recover their money this way than by dealing directly with the people who are in debt.

Some people in debt may be wondering what is debt consolidation? A debt management plan is a form of debt consolidation – but it can also be where you take out a new loan to pay off all your existing debts. You end up borrowing more money to pay money you already owe, but the debt consolidation loan is usually at a lower interest rate than the interest you will be being charged for the various credit cards, overdraft facilities and other debts outstanding. Most debt consolidation loans are structured over a longer payback period, so you will probably end up paying more in the end, but you have the peace of mind of knowing that your existing debts are cleared and you only have one monthly payment to make.

The danger for some people with a debt consolidation loan is that they are then tempted to spend again, before they have paid that loan back. Going down the debt consolidation loan route requires self-discipline to avoid making a bad situation worse.

Read more about your debt management options here

Debt: Reality vs Perception

Source: Payplan – IVA and Free Debt Management Plan provider.

Money as Debt

There is a very interesting video produced a couple of years ago called Money is Debt.

It explains the origins of banks and money and explains how our current financial system was created and self perpetuates.

It is around 45 minutes long and so needs a little time and concentration. It’s worth the effort however if you are interested in how and why money and debt are related.