The college grads are more prone to get into financial troubles due to their reckless spending habits and financial mismanagement. Some of the expenses that constitute a part of a student’s financial list are College fees, Books, Stationary expenses, Birthday presents and shopping. Some of these are necessary and cannot be skipped. Again, if your finances are backed up by a student loan you may have to face the extra burden of paying it back each month.
Taking care of so many financial aspects along with the addition of the student loan can be a real problem. If you need to settle your financial woes soon you need to find out a solution that can take care of such debts before it gets unmanageable.
One of the best ways to do it is by consolidating all your loans into a single one. It will help you get all your loans in a single platform and pay them together. You do not need to remember them separately and the chances of defaulting on payments also get reduced. But there is a proper way to do it or you may end up paying more. Here is a check list:
- Consider it ‘good debt’- Unlike other loans the student loans can be taken as good debts as the money is used in giving you a better future. You are not wasting it. With the help of the loans you can pay off your fees, cater to your food and other expenses. The monthly payments on these loans may be high but you need to count them as a good expenditure.
- Multiple loans into a single one- You may have taken multiple loans to settle various financial woes. But with consolidation you can collage them into a single one with a single interest rate. These can save you from defaulting on payments and remembering each due date. Managing a single loan becomes an easy task any day.
- Interest rates on single loans may be higher: The interest rates on different kind of advances are different. Sometimes they are even higher than the consolidated interest rate on a single loan. If you can consolidate all your multiple credits with an affordable interest rate, you will be paying less than what you would have done separately on each.
- 4. Choose your lender prudently: If you want to consolidate your loans it is not necessary to stick to any particular lender. You can do it with anyone who offers you the best possible interest rates prevalent in the market. Before you decide on any one make a thorough research and make sure you are getting the best deal.
- Look for offers and discount deals: Try and look for deals which offer you incentives or discounts on interest rates. This will help you to reduce your payback amount. It is best to search for reputed firms which often provide for such discount schemes.
Apart from these you also need to be prudent about selecting the loan that can be paid be within a short period of time. You need to be extra careful while signing any agreement. Read the terms and conditions carefully and make sure you do not have any doubts on any clause. The consolidation process can be effective only when you are careful with your finances.
Author bio: Jonny Pean is a financial consultant and writer for EasyFinance.com. He advises people on making the right personal finance decisions and helps them get rid of their loans and debt problems easily.
Short note: The article deals with ways to deal with the multiple student loan issues that the college grads face. Most often they get into severe debts due to these loans and find it difficult to pay back later. A few tips are given here to have a better approach to these problems.