Student Loan Debt Consolidation

What to do after graduation

You've graduated from your post-secondary studies, you're looking for a job, and you're ready to take on the "real world." But first, you have to do something about that student loan you've been pretending didn't exist for the past four years or so. There are good ways and bad ways to pay off a student loan. Knowing the basics of loan repayment will help put you in a good position to pay off your loan smartly.

Pay it off fast

First of all, no matter how much your loan is, pay as much per month as you can - try not to simply settle for the minimum payment. The less you pay per month, the longer it will take to pay off your loan, and the more interest you will pay in the long run. If you have extra money, spend it on paying off your loan as quickly as possible.

Loan consolidation

In some cases, particularly when you have multiple loans to repay, loan consolidation is a good way of restructuring your finances to your advantage. Loan consolidation is basically taking out a new loan to pay off multiple loans. You may want to explore loan consolidation to secure a better interest rate, a fixed interest rate, or simply to make you loans easier to manage.

Payment deferral

If necessary, you can get your loan payments deferred, as long as you have not already defaulted on your loan. During a period of deferment, no payments are required and interest does not accumulate. The most common deferment conditions are if you: a) are unable for an extended period of time to find full-time employment, and b) if you have experienced economic hardship for an extended period of time.

Other options

It is possible for student loans to be discharged through bankruptcy. This can only occur if you can prove you have experienced "undue hardship." What constitutes undue hardship varies from jurisdiction to jurisdiction, and is generally very difficult to qualify for. Only U.S. Federal student loans may be erased in the event of total and permanent disability - for those holding private student loans, bankruptcy is the only option for discharge.