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You went to school with high hopes. You planned to
get a great paying job. But now, you don't have a
high paying job, and you can't repay your school
loan. Sadly, this is an all too common story.
Many students start school but can't finish due to
family commitments, medical problems, or other issues.
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Some students even attend training or vocational
schools only to have the school cease operations,
so they cannot finish their education.
The saddest part is that when you first become
a student you are young and full of hope. You
assume you will finish your courses and everything
will work out. It's only later when plans don't
unfold as you had hoped that you are stuck with
a school loan you can't afford to pay, and no
hope of ever having the money to pay it back.
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What are my options for dealing with a school loan?
Your first option, of course, is to repay it in
full. This may mean taking a second job, getting a
part time job, or cutting your expenses so that you
can afford to repay it on your own. By doing this
you preserve your good credit.
Of course if you don't have sufficient income to
repay it on your own, you must look at other options.
You can contact your school loan lender and
ask for an interest deferment, or perhaps an interest
reduction until you get back on your financial feet.
You can also try for a school loan consolidation
loan. To do this, you approach a bank, trust company,
or credit union and ask them to loan you enough money
to repay your student loan. Obviously this does not
reduce the total amount you owe, but you may be able
to negotiate more favorable terms of repayment.
For example, if you have three years left to pay
on your school loan, your school loan consolidation
loan may be amortized over five years or even longer,
so your monthly payments can be drastically reduced.
If you have a cosigner, they may be able to cosign
your school loan consolidation loan, which may give
you a better interest rate. With a lower interest
rate, more of your monthly payment goes towards the
principal owing, so you get out of debt faster.
If you have outside security, like a car or house
that you can pledge as security, it may be possible
to use that security to get a school loan consolidation
loan.
Start by talking to your bank, or approach
other lenders, and with your budget in hand you know
what you can afford, and that's the first step in
negotiating a school loan consolidation loan. Use the search box below to find more information:
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