Student Loan Repayment Plans Outside Of Consolidating–Ways Graduates Erase College Loan Debt Obligations

Student loan repayment can be both affordable and accomplished through methods outside of a student loan consolidation as graduates have used various ways to find debt relief from their college loan obligations that did not involve seeking a consolidation loan. While there are both federal and private student loan consolidation options, graduates may be able to use alternative methods for erasing their student loans without having to consolidate these debts.

For federal student loans, students may qualify for an income-based repayment program which will only require that they meet a certain amount on their monthly student loan obligation, in relation to their monthly income. Yet, when students have multiple student loans in place, this is where many feel that consolidating is their only option when it comes to erasing their debts.

However, there are financial advisers who feel that consolidating debt of any kind is simply a bad idea as it can cause the overall costs that one must meet to increase. Understandably, graduates will want to save money when it comes to repaying their student loan debt obligations, but many are drawn into the convenience of a student loan debt consolidation plan and the fact that only one monthly payment is required. While there are those who also have found themselves in a situation where simply meeting multiple student loan debt obligations isn’t within their financial means, getting a student loan consolidation could be the only option to avoid missing payments.

Yet, before consolidating, students are often advised to contact their student loan lender to see whether there are options available when it comes to finding more affordability related to their payment obligations. Graduates who have multiple loans with different lenders may also not have the option of consolidating debt, as federal loan consolidation plans will not allow private loans to be grouped into a federal student loan consolidation plan.

Advisers against consolidation, though, often feel that students or traditional consumers will fare better in the long run if they meet these debt obligations separately. Behind this train of thinking, advisers feel that students who consolidate debt will obviously get a more affordable monthly payment obligation, but even if a low interest rate is also offered, a higher principle amount will take longer to erase as interest will build and overall costs will likely increase.

Graduates who want to repay student loan debts without consolidating can use methods that many financial counselors suggest on other forms of unsecured debt, like budgeting in a way that allows graduates to erase their debts one source at a time. This particular method is usually one in which a graduate will pay as much money as they can towards one particular student loan source, either the one with the smallest principal amount or the highest interest rate, while making minimum payments on the others. Ideally, students can use this repayment plan to combat one debt in a timely manner and then proceed to erase me other debts in a similar fashion.  Since lower principal amounts are being paid off, this could take less time and lower costs overall.

Yet, when it comes to erasing student loan debt, graduates must make sure that they do not run the risk of missing payments or defaulting and, if financial troubles arise, contacting one’s lender to explore various options should be done early so that a proper solution can be found and financial troubles related to student loan debts can be avoided.