Graduating with a degree on one hand and student loan on the other seems to be the norm nowadays.
Los Angeles-Long Beach, CA (PRWEB) June 29, 2014
Debt Consolidation USA explains in an article published last June 25, 2014 how student loan borrowers are making payment mistakes with their college debt payments. The article titled “3 Student Loan Payment Options That Can Ruin Your Finances” shares how student that has already separated from school are having missteps on their student loan payments.
Student loans are already much a part of the US educational system as the units being taken by the undergraduates. Graduating with a degree on one hand and student loan on the other seems to be the norm nowadays. With about 40 million Americans carrying student loan, this has grown to be a big economic problem for the US.
The article shares that the primary problem with student loan payments is not making the payment. There is an increasing number of student loan borrowers that are going into delinquency and default. The difference of the two is the fact that once a borrower is not able to make the payment after the due date, the payment is already considered delinquent. The account enters default once it passes 270 days without sending payment.
As most of the borrowers know that bankruptcy would not discharge a student loan, other borrowers are being creative in adapting to the system. The article explains that there are student loan borrowers that will pay off the student loans using credit cards and declare bankruptcy. Unsecured loans such as credit cards had high chances of being discharged when approved for bankruptcy.
But the article warns borrowers that the bankruptcy courts can see through the scheme. Once disapproved for bankruptcy, the borrower faces higher interest rates for credit card payment as compared to interest rates in the original student loans.
Taking out home equity loans to pay off student loans are becoming an option for some borrowers. The article shares how this is a risky financial move. In case of default, the lender has every right to exercise lien on the property and take it away from the borrower. This is a payment option that needs careful evaluation by the borrower and the whole family.
To read the rest of the article, click on this link: http://www.debtconsolidationusa.com.