Top 6 Ways To Pay Off Student Loans
Student loans can be a pest at times. After sacrificing multiple hours of school you are left with a degree and a pile of student loans. Over 44 million borrowers owe more than 1.4 trillion dollars in student loan debt. Getting student loan debt under control can be very simple if you are willing to put in the effort. Even if you can’t pay off your student loans in your current situation there are ways to reduce the burden on you.
1.Apply for loan forgiveness.Many people are unaware that loan forgiveness is a real thing. Public loan forgiveness and teacher student loan forgiveness programs are available for individuals that are eligible. Many times these programs have requirements that must be met like making over 120 on time payments before becoming eligible.
2.Refinance student loansWhen it comes to dealing with loans overtime you could pay more money when you have a high interest rate. A solution to minimizing your interest rate would be to refinance your student loan. Refinancing your loan will help you pay off your current loan with a lower interest rate making it affordable for your budget.
3.Make lump sum paymentsYou may want to use your tax refund to go shopping, buy new furniture, or a vacation. This year instead of blowing through your refund take a lump sum and pay off some of your student loan debt.
4.Pay more than the minimum amountPaying more than the minimum can help you reduce the amount of interest accrued on your loan. In reality you will end up paying less money for your loan when you increase your payments.
5.Make an extra student loan paymentMaking an extra student loan payment is one of the best & fastest ways to pay off your student loan debt. If you want to begin making extra payments contact your lender, and notify them that you would like to start making additional payments throughout the year. Specify that you would like to make an extra payment to your principal amount only to reduce interest.
6. Request a consolidationRequesting a loan consolidation simply means combining all of your student loans into one single loan and one single payment. In most cases, this option can lower your interest rate as well as lower your monthly payments by almost half. This can shorten the length of time that you pay on your loan and can also save you money.
What does your credit score range mean?
A credit score is a number that represents how much of a risk and how likely a borrower is to repay debt to a lender. Your credit score is based off of a variety of factors. The factors that make up your credit score would be your payment history, number of accounts, and amounts owed. The higher your credit score the lower your risk will be as a borrower.
Excellent Credit 800 to 850
Consumers that have a credit score of 800 to 850 are considered to be responsible with handling and managing debt. People with excellent credit are deemed as low risk candidates because they have a long history of no late payments & low balances. Due to them being low risk candidates they are more likely to be approved for loans with low interest rates.
Very Good Credit 740 to 799
Consumers that have a credit score of 740 to 799 are considered to be generally responsible with handling and managing debt. People with very good credit are also deemed as low risk candidates because they have a long history of almost no late payments and fairly low balances. These low risk candidates also qualify to be likely approved for loans with low interest rates.
Good Credit 680 to 739
Consumers that have a credit score of 680 to 739 are considered to be slightly above average when it comes to being responsible with handling and managing debt. People with good credit are viewed as semi-low risk because they may have a few dings within their report. These semi-low risk candidates are usually likely to be approved for loans, but they will have competitive interest rates.
Fair Credit 620 to 679
Consumers that have a credit score of 620 to 669 are considered to be somewhat decent with handling and managing debt. People with fair credit are considered borderline high risk because they may have a few bad accounts within their report, but no major delinquencies. These borderline high risk candidates are less likely to be approved for loans and if so they will have high interest rates.
Very Poor Credit Under 620
Consumers that have a credit score under 620 are considered to be irresponsible with handling and managing debt. People with very poor credit are considered to be very high risk due to multiple defaults on their credit report. These high risk candidates are usually not approved for loans ,and if so they will have extremely high interest rates.
How To Obtain A High Score?
How do collection agencies work?
Have you ever fallen behind on loans,and you started receiving annoying calls from your creditor? Many times the people that are calling you actually work for debt collection agencies. Here are a few things you should know about who they are,why they are calling, and what you should do:
What is a debt collector?
A debt collector is a person that collects outstanding debt balances. Most of the time debt collectors work for a third party collection agency for the original creditor. Debt collectors are utilized as middlemen to obtain debt and remit the payment back to the credits for a percentage.
What do collection agencies do?
Debt collection agencies collect delinquent debts such as credit card, medical, automobile, personal loan, business, student loan, utility & cellphone bills debt. Collection agencies offer debt collection services to businesses that allow creditors to outsource collections to a third party. After 60 days when accounts become delinquent creditors may contract with a collection agency to get a payment. The creditor pays the collector up to 45% of the amount collected when they are hired.
How to get the collection calls to stop?
If you are getting fed up with collection agencies contacting you there are a few things that you can do to get them to stop. Make sure you understand your consumer protection rights that all debt collectors must adhere to such as no harassment, pretending,unfair practices,and contacting others more than once regarding you. The first option is to pay off the debt if you can afford to. The second option is if you can’t afford to pay the collection off let them know. Last but not least, if you don’t prefer those options you can simply write a letter to the collector to stop contacting you and they must obey.
If you are having problems with colleciton agencies and don't know where to start contact us today.
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Advanced Credit Help is here to share informational tips on how to improve your credit score.