Hey - What Do You Mean I Have To Pay This Money Back?
Jul 02 '01
The Bottom Line Paying for student loans is not easy, and takes discipline...but it can be done.
Most of you have seen the endless stories from several years ago regarding student loans. The various news programs (20/20, Dateline, 60 Minutes, etc.) all did reports on people who had amassed substantial student loan debt, and were not paying the money back. Of course, the stories on television usually centered around doctors and lawyers that could easily repay the loans, but refused. At that time, there were no penalties in place for failure to pay. That was then...this is now. Now, if you don't repay the loans, you are in big trouble. They can take your car, your house, or pretty much anything else you own if you don't take care of this debt.
The first step toward getting the debt paid is to look into consolidation. What the consolidation process does is allow you to make one payment instead of several. Most students end up borrowing from several agencies or banks, and find themselves owing multiple payments. Each of these loans will also have differing interest rates. It can be a real pain to keep up with, especially after the five-year mark. After five years, the interest rates will increase unless you have paid off the loan.
My advice to you would be to try to get the loans paid off before the interest goes up. This will save you interest cost, and also allow you to get out from under that debt. The key is discipline. You have to be diligent about making your payments on time, and adding as much as you can to your principal amount. When we paid ours off, we decided not to consolidate. We started with the smallest loan, and put as much extra money as we could on our payments to get the principal paid down. In the meantime, we paid the minimum payments on the other loans. Once we had the small one paid off, we turned our attention to the next smallest loan. We continued in this manner until they were all paid off.
If you have consolidated your loans, you can still make extra principal payments on your monthly note. It may seem like you aren't making much progress, but if you continue to put money toward the principal, over time it will make a big difference. Some people may read this and ask, "Why should I pay the loan off early? Why not drag it out as long as I can?". Well, it really depends on the individual; some people want to get their debts paid as quickly as possible, while others don't really worry about it. By paying off early, you save money on interest, and also free up the money that you are putting on loan payments every month. This money can be invested, or used to make other purchases.
The one sure thing about student loans is that they do have to be paid back. Think of them as an investment: you used the money for your education (hopefully), and now that you are out in the world, you need to pay for that education. Once you have them paid off, you will feel a real sense of satisfaction. It will be as if your college education is finally paid for.
 |
|
|
|
|
|
|
Epinions.com ID:
tkerodd
|
 - Top 500 |
|
Location: Jackson, MS
Reviews written: 507
Trusted by: 118 members
|
|
|
© 1999-2009 Shopping.com, Inc.