You are about to graduate college and dive right into the workforce at full-speed and never turn back!
Money will soon be flowing your way, so much in fact you won't even know how to spend it. Life is going
to be easier here on out... until reality sets in. The economy is up and down and job stability and
growth is often feinting. There is no way to ensure you'll find employment out of the gate, and further
possibility that you're pay will be anything significant. Soon your mailbox will be home to student loan
bills... coming month after month without delay or regard for your current employment situation. Uncle
Sam is coming. He lent you money and he wants it back NOW! Unfortunately Uncle Sam is not someone you
can negotiate with. The heavy hand of government is knocking and it's time to pay up. Before you crawl
under your covers and cower in the face of financial adversity, take a few moments to reflect on your
options. Paying off that student loan may not be as difficult as you think!
An estimated 50% of all college graduates have taken out student loans. Student loans, like any debt, can have significant influence on your credit scores, both positively and negatively depending on how the loan is maintained. One of the worse things to do is default on a student loan. Defaulting on your student loan will drive your credit score into the ground, forging a future of hardships and difficulties for you financially. There are several things you can do to ensure your loans remain paid, even during times of financial struggle.
Reduce your debt burden
Reducing your debt burden is one step in the right direction of maintaining a good credit score and reducing the possible risk of loan delinquency. A few simple rules of thumb are to never sign up for credit cards with high APR rates, do NOT take on any more loans while you still have your student loan, and always try to put some money in the bank "for a rainy day". Sometimes that is easier said than done. If you're one of the millions of Americans who are already caught in a cycle of debt, it may be a good time to consolidate your loans.
Get out of high interest debt
High interest credit card and bank loans are going to keep you in a cycle of debt that you'll never recover from. Get out of that debt NOW by considering a consolidation loan. With consolidation loans you can roll all of those high interest loans to multiple lenders into one lump payment at a greatly reduced interest rate. Imagine saving hundreds, perhaps thousands each month and saving your credit score at the same time! Before you run out and consolidate your loans with the first lender you come across, take a step back and do some research. Not all lenders will treat you equally. Some lenders may have higher interest rates on their consolidation loans while others may offer strict re-payment terms.
When student loan consolidation makes sense, and when it doesn't
Student loan consolidations are not for everyone. Each individual is looked at on a case by case basis. The viability of entering into a student loan consolidation will depend on how LONG you want to hold your student loan debts and how much it will actually reduce your payment. Also, your ability to find consistent paying employment will be a key factor in determining if you need to consolidate. Consolidation can be a tremendous help and potentially save hundreds each month, but you need to look at your current situation. Let's take a look at some key figures on student loan consolidation savings to see just how much you could save each month. The following chart is based on Stafford loan rate of 6.5%.
| $10,000 |
$113.75 |
$87.80 |
$25.95 |
$311.43 |
| $20,000 |
$227.50 |
$175.60 |
$51.90 |
$622.86 |
| $40,000 |
$455.00 |
$351.20 |
$103.80 |
$1245.72 |
| $80,000 |
$910.00 |
$702.40 |
$207.60 |
$2491.44 |
As you can see in the chart above, the amount saved can be quite dramatic when your student loans approach closer to the $100k mark. Student loans equaling less than $10,000 do not qualify for loan consolidation. The savings would be minimal at best. Consolidation makes the most sense for anyone carrying very large student loan debt who needs assistance in easing the burden. If you fit the criteria, do yourself a HUGE favor and sign up for a student loan consolidation now! The process is simple and fast and you'll thank yourself for it every month until your loans are paid off.
The key to paying off debt is to play the market and know what you're up against. Reducing your high interest debt through student loan consolidation is just the first step to ensuring your financial freedom and stability. It's up to you to make your payments on time and to treat the loan as seriously as possible. Your earlier loans and credit WILL affect you in the future. Just how it affects you is dependant on you. Don't let your students loans control your life. Instead, let your life control your student loans through
student loan consolidation.