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Sep-10th-2011

Tips for Getting College Loan Debt Under Control

When college students take on the responsibility of a private loan, it is a new experience that takes some getting used to. In most cases, repayment does not begin until the student stops taking classes or graduates from school. Regardless of whether the individual completes a degree, the student loan must be paid in full under the conditions specified in the agreement. Ideally, the payments are made as required. Sometimes, however, this is not possible. If individuals have difficulty fulfilling their obligations, there are a number of ways to remedy the situation. The most important thing is for them to keep in contact with their creditors and make other arrangements until their college loan debts are under control.

Restructure Spending
One of the easiest ways to better afford loan payments and other bills is to restructure spending. While living in a nice apartment without roommates is an ideal situation for most people, it can be a financial drain. Getting a roommate or moving to a more affordable place is one way to reduce rent. Car payments are another high expense that can be reduced. The car can be sold and the loan paid off. In return, the person can buy a less expensive vehicle or try using public transportation until things improve. Eating out and spending money on entertainment such as clubs, movies and road trips are fun, but use up funds that could be spent on student loan payments and debt reduction.

Change Payment Date
When there are multiple bills due at the same time of the month, it is sometimes possible to change a payment date. When creditors are aware that they could receive regular prompt payments at a different time of the month, they are often willing to change the payment date. This may even out expenses and help maintain credit in good standing.

Avoid Credit Cards
While the use of credit cards is alluring, it can create a bigger problem than the one that exists. Spending money on credit means that the amount must still be paid back, and most likely with interest. If a credit card is necessary, the balance should be kept low or paid in full every month.

Postponement
When other strategies do not work, it is possible to buy some time by requesting to postpone payments. Sometimes called a deferment, student loans may be set back for a limited time. This might be authorized by the lender under cases of military service, further enrollment in school, internships or economic hardship. The borrower cannot simply decide to stop making payments for a time; it must be done through proper channels.

When a student is getting college loan debt under control, it is always best to contact creditors if a payment is going to be late. The best time to start taking action is before things get beyond the point where credit can be repaired.

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