Student Loan Refinancing

Many of my readers seem to be students. Many student have high student loans. Today's post is about how to manage and eventually pay off your student loan with the least cost to you.

The first option is to consolidate your student loans with credit card, auto, and house loans in order to get a lower interest rate. Debt consolidation, just like it sounds, combines individual debts at differing interest rates into one easy-to-manage loan at the lowest possible rate of credit. There are a number of firms that do this for you.

Since student loans are the only debt I have, this isn't really a great option for me: the money I've borrowed for my student loans have prevented me from entering credit card or auto debt (that's the point, right?). So what other options do we have?

The other major option is to contact your loan provider and ask for a lower interest rate or a longer period of repayment. Obviously, a lower interest payment is preferred because it is reducing your long-term debt. Students can ask to refinance their loans once they leave school.

The final option of dealing with your student loan is to not pay it at all. By defaulting on your loan, you are basically screwing the system over for your personal benefit. However, there are serious consequences to this: your credit rating will be destroyed and, depending on who you get a loan from, collection agencies will come after you and try to repossess your stuff.

If, like many students, you don't have any assets, then declare bankruptcy. Move overseas, where they don't care about your Canadian credit rating, and success, you've now avoided paying your student loan.

26 comments:

thenitefalls said...
January 26, 2011 at 11:22 AM

The best thing to do is get scholarships and financial aid :)

Smile said...
January 26, 2011 at 11:33 AM

Student loans are pain to deal with but a life saver in some cases

The Liquor Guy said...
January 26, 2011 at 11:57 AM

Amen, I can relate to this...

Arcita said...
January 26, 2011 at 11:58 AM

i always LOL at people who rack up nearly $200k worth of debt in order to get an english/philosophy/art degree. stupid people will be stupid

Vapor said...
January 26, 2011 at 12:04 PM

I finally got all of mine paid off... then went back to school.

MRanthrope said...
January 26, 2011 at 12:04 PM

I got through college without any debt, it just took forever because I worked more hours than I spent on campus to pay for everything =/. Even with my job, without Financial Aid I would have been screwed.

mrecan said...
January 26, 2011 at 12:38 PM

hellyeah the last tip is great

Justsayin' said...
January 26, 2011 at 1:25 PM

Took me forever to pay mine off. But still glad I could get one.

techagent said...
January 26, 2011 at 1:40 PM

after I graduate I plan on spending the most amount of money I can to pay off loans and have very few luxuries. This will fix that problem the fastest.

SuciƓ Sanchez said...
January 26, 2011 at 1:55 PM

Community College FTW!

StockGuy said...
January 26, 2011 at 2:03 PM

Student loans in the United States are basically a scam.

Almost all student loans are backed 100% by the federal government, and if you default on your loans you have no consumer protection (unlike other consumer loans). So banks like Fannie May (who finances a large chunk of them) give out these loans with absolutely no risk at the cost of student protection.

So if you default expect to have the government shitting down your throat for the rest of your life. It's a terrible system.

Les said...
January 26, 2011 at 4:25 PM

Why are the big companies so eager to bone each and every generation?

Engelhart said...
January 26, 2011 at 5:00 PM

My university fees are covered by the government, and I'm pretty sure there's no interest, but there's a slight discount for paying them upfront.
I don't have to start making payments until I start earning a certain amount per year.

Chris said...
January 26, 2011 at 5:44 PM

College is one of United States' biggest scam.

Das Auto! said...
January 26, 2011 at 6:19 PM

my goal is to save up enough money so i don't have to take out a loan when i go back to school

HSP said...
January 26, 2011 at 7:39 PM

Well I suppose escaping the country is one way... lol.

I'm from Australia and the situation for students here is pretty much as Engelhart described. I feel bad for those from the States.

MetallicaFan459 said...
January 27, 2011 at 8:28 AM

I'm lucky I'm from Scotland where there are no tuition fees, and, if you do decide to take out a loan, you only start paying it back when you earn over a certain threshold. I think the fees in the US are ridiculously expensive.

Laughing Vault said...
January 27, 2011 at 9:52 AM

im lucky i got scholarship

TheDude748 said...
January 27, 2011 at 8:24 PM

Thanks for the pro-tips. I'll definitely find this useful in the near future :)

More Ducks said...
January 29, 2011 at 10:22 AM

I hope to get a decent job so I can pay off my loans within a few years after graduation. Scholarships would be very helpful as well.

Shout Breakout! said...
January 29, 2011 at 12:32 PM

Student debt is out of control.

Red Baron said...
January 29, 2011 at 11:56 PM

i paid mine off shit's gay

Rawr said...
January 30, 2011 at 12:22 PM

interesting post, keep it up

HiFi said...
February 3, 2011 at 6:02 AM

Debt's a killer! Consolidating debts is good. Defaulting....ooooh, doesn't sound like a very good idea. lol.

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