Life
can be difficult and confusing. The solution is, try to make a goal to
understand negative events of the past and take responsibility to change things.
Now that when you can see the cause and effect you can easily understand how your
response to the past has shaped the person you are today.
The more you understand, the bigger the clue
to solve the riddle of debt management. A debt management plan acts as a
trigger to learning. You need to ask yourself why a particular event stirs
emotion.
As a college student you may crave for independence and freedom, but you are also laying foundation for your future life. By understanding the meaning of smart debt management and dumb debt management, you can master the area of debt management.
As the name suggests, dumb debt management plan is a sensitive chord within us. Most of us fall in the trap of dumb debt management; it occurs when you buy things at credit that you really cannot afford. The major symptoms that signify you are under the trap is mentioned below-
·
You take long time to pay off your debt, so in
the end, you end up paying exorbitant interest rate.
·
Sometimes debt becomes costlier than the original
amount borrowed.
Poor financial plans can lead to this problem.
Budgeting is the ultimate way to resolve the problem. Obviously, dumb debt
management is just like an alcoholic person who can destroy everybody’s lives.
Smart
Debt Management Plan
There are times when life is caving in on you. At such a time, obtaining a loan becomes necessary. It typically leaves you in a better financial position because it provides you an asset with a replacement cost. For instance, obtaining a mortgage or student loan is considered a smart move. The major part is to understand total cost of the loan and to see whether you will be able to repay it in future.
It
literally provides you with financial freedom, and through it, you will learn
to recognize it as a period of growth. Think about it from each and every angle
and try to resist any loan that adds thousands of dollars to your pile. The
sooner you understand how to manage your loan you are in control of your life.
If you desire happiness, you can have it as long as you are willing to take
responsibility for your financial plans.
Nobody has peace in his or her life without doing financial work. Don’t waste your time feeling sorry rather take a strong step to cure the problem.
Student Loans Debt
It is very common way to repay your college fees. Selecting the right loan is a necessary step towards good financial management, thus allowing you to acquire smart debt management plan rather than dumb management plan. Student loans are proffered by many debt management service companies. But selecting the right loan from the right company can have your way to success. Not only it provides a valuable experience, at the same time it enhances your employment prospects too.
So,
don’t be afraid to look in the eye and tell the truth. If you don’t do so, you
will lose every game of the life. Loans from federal govt have desired terms
and conditions. Also, it offers you an advantage of a loan deferment period.
For instance, Stafford loan does not require repayment of an interest till you
are out of school. However, these loans are not available for each one of us.
Unsubsidized Stafford loan is also available, but they are a bit expensive in
comparison to the latter one. Since the interest will accumulate from the
beginning, it becomes quintessential to pay while you are in school. It will
help you to chip away the interest rate before it becomes a pile.
Although Federal loan is a cheap way of obtaining financial freedom yet, there is a host of other debt management service companies that can perhaps, resolve your concerns or issues. So, instead of getting angry and resentful, you need to learn something about how to manage your debt.
Steps for Managing your Student loan debt
1.
Before considering student loan, you must explore
other options like free financial grants (scholarship, grants, and other work
studies). You should also learn how to quickly pay off student loans. Be
aware of student loan forgiveness programs.
2.
Consider all your options and compare which one is
affordable. Only consider private or alternative loan options as a last resort
to bank upon. Though, these debt management service companies will try to lure
you, you need to be vigilant and watchful.
3.
Budgeting is an important aspect that cannot be
denied. Consider to plan an in school and out school budget.
4.
Determine how much you can afford to pay and based
on that borrow on how much you can practically pay.
5. Credit
Card Debt Management is another thing that needs keen attention. These
plastic cards offer you great advantage, at the same time they can be the root
cause of all the problems.
Here
are some tips to manage your credit cards:
·
The very first step in credit card debt management
is debunking wrong notions associated with a credit card. They are not free
money; unlike mortgage or student loan. The high interest rate and fees make it
an expensive debt.
·
Another false notion that students carry is credit
cards are essential to build their credit history.
·
Credit card companies offer teaser rate to
influence customers in their favor. These rates are temporary and will lure
you to apply for a credit card.
6. Estimate
your loan payment and how much you are expected to pay each month.
7. Create
a good credit history.
8. Consolidate
your loans, if you have several of it.
9. Contact
your bank or loan holders for a change in status as it may affect your ability
to pay loan.
10.
If you have any unresolved issue, you can contact a
student loan ombudsman.
About the author -
Erin Taylor holds a Master's degree in
Commerce from JNU. She works as a financial consultant. To find debt
consolidation loans, fast loans, education loans and more visit - business angels.
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