There are individuals who have student loan debt and may find themselves in a bad credit situation after they graduate or later in life. When someone has bad credit it often makes their financial life much more difficult than it has to be. What many people try to do is consolidate debt in the hopes that it will be easier to pay off, thus they can increase their credit score.
However, many people believe that keeping debt separate is the best option, but in this case there are those who worry about repaying their student loans when it comes to trying to get out of debt. If you have a bad credit score, and you’re trying to work your way into a better credit score by improving your credit history, budgeting and managing your money is going to be vital.
Student loans, luckily, oftentimes come with a deferment or forbearance option. For anyone out of school a forbearance option is what will most often be available and typically it’s easier to get a forbearance on federal student loans and other types. Yet, getting a forbearance on student loans can last anywhere from a few months to a few years and anyone in a bad credit situation may benefit from having their student loan repayment in a period of forbearance.
Obviously, talking to your student loan lender is the first step to getting the information you need and the best route to take when formulating a plan on how to combat your bad credit but also alleviate yourself a student loans while you do so. For people who have a large amount of debt, being rid of one source, even for just a short time, can be helpful.
However, keep in mind that by using a forbearance plan to make getting out of debt easier, isn’t going to erase your student debt obligation and in some cases there is still interest accruing on student loans. Again, talking with your lender and explaining your situation is going to be the best way to find out what options are available and what the is the best route to take.