Avoiding financial problems from student loan payments

These days, a large number of college graduates in Illinois start their careers with debt because they took out student loans in order to get their degrees. Fortunately, repayment of those loans doesn't begin until six months after graduation. This can give new graduates time to prepare in order to avoid financial problems in the future.

The first thing to do it to figure out who the lenders are and how much is owed to each. Making a list by lender can help a student understand what they are going to be up against in terms of payments and total amount owed. All loans directly from the government and guaranteed loans may be found online. A graduate's school may be able to direct him or her to the appropriate website. Non-guaranteed loans will be listed on a credit report, which can also be obtained online.

Once all of the information is gathered, some decisions will need to be made. Some people in Illinois decide to consolidate all of their student loans into one payment with a fixed interest rate. Others may decide to pay them off like credit cards, starting with the highest interest rate or balance. Regardless of how a person decides to handle repayment, now is the time to make budgeting decisions based on the information.

Not knowing exactly what is owed can be disastrous financially. Nothing is worse than thinking a budget has been figured out only to be hit with another bill that wasn't expected. From there, it may not take long to develop financial problems that can quickly deteriorate. If this has already happened, there are ways to deal with that debt, such as bankruptcy protection. Granted, student loans typically cannot currently be discharged in bankruptcy, but freeing up income by discharging other debts could make repaying student loans more budget friendly.

Source: Forbes, 5 Things You Need To Do With Your Student Loans Right Now, Maggie McGrath, Sept. 30, 2013

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