Understanding School Loan Debt

If you are like most students who have loans, you fairly well ignore your school loan debt as it accrues. Most people simply figure that they can finish school and then worry about their outstanding loans when they have a job. That is assuming the job market will be open to their degree and skills.

Understanding School Loan Debt

If you are like most students who have loans, you fairly well ignore your school loan debt as it accrues. Most people simply figure that they can finish school and then worry about their outstanding loans when they have a job. That is assuming the job market will be open to their degree and skills.

You need to face facts. Sometimes it is hard to find a job or at least one that pays well enough to cover your monthly expenses as well as your outstanding school loan debt. Before you get into the repayment period on your loan, or fall into delinquent status you need to get a firm understanding of your debt and how to handle it. There are a few ways to handle debt without taking the ostrich approach.

Consolidation of your School Loan Debt

When you are unable to handle your loans individually, you can consolidate them into a single loan. This sounds like a great plan, and it works out great in many cases. You do need to realize that consolidation is not for everyone. In some cases you can save a great deal of money by simply making payment arrangements with the lenders and paying off the loans one by one. The consolidation loans offer low rates, but sometimes the rate you already have is so much lower that you will wind up spending thousands more. In addition, you can lose the grace period you had for repayment if you consolidate too soon or while you are in school.

It is always a good idea to investigate your repayment options before getting a consolidation loan. Your school loan debt is often best handled in increments rather than as a lump sum.

Other Types of School Loan Debt

Some students will go as far as charging some part of their education financing on credit cards. Obviously this can result in a number of problems. Credit cards typically carry incredibly high interest rates which compound monthly. As soon as you charge the amount it becomes due with the next month’s billing. If you waited to repay this type of school loan debt you can have tens of thousands of dollars to repay.

If you have this type of school loan debt you need to whittle it away quickly. Make arrangements with the company and pay off the debt soon. A good rule of thumb is that you pay off your highest interest debts first to get a handle on your finances.

Debt Consolidation

Debt Consolidation is a widely-used term to describe debt repayment plans* that allow you to combine your monthly payments to your creditors into one monthly payment, often combined with lower interest rates and other creditor benefits, to get you out of debt as quickly as possible.

There are really two types of debt consolidation plans available in order to provide these benefits – a Debt Management Plan or a Settlement Plan. Both plans feature the benefits of a combined monthly payment, but the way they reduce your debt is quite a bit different.

So which plan is right for you?

Determining which plan is right for you really depends on your specific situation including the type of debt you have, your income and ability to make consistent payments, and what you agree is affordable.

Within this guide, we’ll walk you through your options so that you can understand which path works best for you. We invite you to explore both programs and learn how they work, who they are designed for, and what are the pros and cons of each.

Reasons for considering Disability Insurance

Do you know how you would manage to survive if you suddenly could not work tomorrow? Would you have enough money saved up to live in the same house or apartment you’re currently living in? Could you still make car payments, send your children to the same private school they’re attending or even cover basic expenses like food and clothing? These are all questions that millions of Americans ask themselves each and every day. The truth is that many of them worry about what would happen if they were injured on the job or took ill and simply could not work for an extended period of time. The truth is that no one is built to overcome such adversity. However, there is a way to make sure that you are your family are covered, should the worst-case scenario arise. Disability insurance is one option. Disability insurance allows you to prepare yourself just in case you should fall sick or get injured and be able to work. It essentially allows you to insure yourself against such an instance and helps you to provide a steady income should the need ever arise. Like car insurance or flood insurance for your home, you can purchase an insurance plan for any disabilities that may affect your life at one time or another. That said, there are many varying opinions about disability insurance. Continue reading to find out why you may or may not wish to opt to purchase disability insurance.

What is the difference between installment and revolving credit accounts?

Installment loans are loans extended for a specific purpose, a specific time, and a specific rate of interest. Normally the buyer signs a security agreement giving the lender the right to take back the property being purchased in the event the borrower does not pay in full. Installment loans are used for major purchases such as homes, cars, major appliances, recreational vehicles, expensive furniture and other high value items. In the normal course of events installment loans involve monthly payments. At the end of the prescribed time the installments (payments) have been made as agreed, the loan balance is zero, and the buyer owns the property free and clear.

1. Get Your Credit Reports

If you aren't already keeping a close eye on your credit report, you may not become aware of a problem until you are denied credit. Whether you are preventing that situation or trying to fix it, the first thing is to get your credit reports from TransUnion, Equifax, and Experian – the major credit bureaus. You can get your report from each company once each year at no charge through Annual Credit Report Service, or pay a fee to receive it directly from the bureaus. Just keep in mind the information on each report since your creditors may not report to every bureau.

2. Understand What Can Be Removed

Just because something is negative doesn't mean it should not be on your report. Your credit report must contain all credit and debt data so long as it is accurate and up-to-date. You may dispute wrong information, duplicate information, and old negative information. “Wrong” information includes accounts you never opened, lawsuits you were never a part of, and data relating to someone else's name. Duplicate information sometimes happens out of error – you may wish to have it removed so creditors don't count it twice. Last, most information on your credit report should not be older than seven years. Some data, such as bankruptcy, student loans, and child support arrears stay longer. Check your state's statute of limitations on those items, as they can vary from state to state.

3. Take Action to Remove Inaccuracies

You will need to file your dispute with the bureau via website, phone, or mail. They will need some kind of identification (typically your social security number), a description of the inaccuracy, and what the information should reflect. If you have any documentation on your side (like court papers or copies of cashed checks) you should include those too – and don't forget to make copies and send it via certified mail. After 30 days a dispute notation should have shown on your credit report and the creditor given a chance to prove their case. If the creditor fails to verify the information, the bureau will have to stop reporting it – but that does not mean it has been deleted. If you receive a letter stating the item has been deleted along with an updated copy of your credit report, then the item has been permanently purged from your report. Otherwise, do not assume the change has been made.

Important Last Steps

Most of the time the above steps are enough to remove inaccuracies. However, if your case is different, write a letter to the creditor explaining why the information they are reporting should be changed along with any documents which support your case. If you still haven't been able to get the change you would like, you can write a letter of explanation which will be attached to your report. This is 100 clearly written words explaining your side with supporting facts and sent to the three major credit bureaus. You never know, those 100 words could make or break your credit application.

Why Correcting Your Credit Report is Beneficial

Most Americans want to own a home, buy a new automobile at some point and apply for a new job sometime in the future. Unfortunately, many of these same people will never get to enjoy these simple luxuries in life because of their substandard credit report and the credit score that goes along with it. That said, there are plenty of people out there who have a less than appealing credit score simply because their credit report does not accurately reflect what their score should really be. In other words, they’re using a credit report that needs to be corrected—and needs to be corrected immediately if they want to turn their financial well being around immediately. If you are one of these people, you might think that correcting your credit report is complicated. However, the truth is that you can correct it on your own (or, to seek help with the correction, see the list of companies who offer to help you correct your problem at the bottom). Start learning about how you can correct your credit report immediately and get started now.

Making your tax audit nominally painful

Preparing a tax audit can be both difficult and intimidating. On the one hand, you’re essentially being investigated by the IRS to insure that you filled out your tax forms properly and paid the proper amount of taxes for a given year. On the other, there’s something in your initial tax filing that has caused a red flag to go off for the Internal Revenue Service. However, it’s also important to remember that not all tax audits are indictments against your tax preparation process. Rather, they are simply to make sure that you’ve filled out your paperwork properly. Therefore, the best way to approach an audit is to be sure you have all you information organized. Below are ten tips from the IRS to help you prepare for an efficient audit. Check out the IRS website for more information on each tip and keep reading to get general ideas on how to make your audit go more smoothly.