Often college students face the perplexing situation when they cannot repay their student loans. Sometimes, especially if the student belongs to a one-man earning family paying the student loans can be burdensome. The pupil might have thought that’ll he’ll secure a good paying job after graduating but he hasn’t managed to yet.
Now, with the excess interest piling on the loan, the student might be in dire needs of financial solutions as paying the loan would mean giving up on his basic needs.
Now, a student might not be able to get out of paying the loan, but he can definitely opt for some alternative options.
Let’s Review Them:
In Case of Temporary Money Shortage:
When a student is facing monetary loss momentarily he/she can opt for 2 options:
Deferment includes suspension of payments without the adding on of interests when a student cannot repay his/her loans. In case you are still a pupil this option is available for several federal student loans. However, to opt for this you have to meet certain criteria and become eligible first.
If you’re a looking for short term financial solutions to your predicament, then consider forbearance. This option allows the temporary suspension of paying your student loan. However, the interest on the student loan keeps on adding up. After your designated time period ends, you will require paying the student loans once again.
In Case You Cannot Make any Payments:
This is the worst case scene when a student has no means to pay his student loan and is in desperate need for financial solutions.
- Discharge of Student Loan
When you feel that you cannot by any means pay your accumulate student loan, the last resort is to apply to a law court to discharge your loan. You will require providing evidence that you have no finance available to cover your loans. The court if feels your claims are just will levy the judgment to renounce your debt. This debt will then be settled by a collections agency.
- Declaring Bankruptcy
While this procedure isn’t an advisable one when it comes to student loans, declaring bankruptcy will help free up miscellaneous funds to cover up your student loans. Now, while this option will offer temporary financial solutions, it can deleteriously affect your credit for years.
For Lowering the Amount to be Paid:
In case, you need options for reducing the amount, here are your choices:
- Rate Reduction Program
If you’re willing to pay automatically to your lender on a monthly basis then this option will allow the reduction in your interest rate. With the gross amount reduced, you can pay the loan as per your means.
- Interest-Only Payments
This type of payment requires you to cover the interest that is imposed on your student loan initially. In this way, you will later pay only the amount that you borrowed.
- Graduated Repayment Plan
This time of student loan payment option requires you to pay a little sum in the beginning, and later when you have the means you make the complete payment.
Well, now have the required financial solutions needed to pay the student loans, don’t whimper and weigh out your options. Good luck!