If potentially losing collateral has led a consumer to seek out an unsecured bad credit debt consolidation loan, it needs to be understood that the overall costs could be much higher for this particular type of debt consolidation loan, and consumers who turn to this opportunity must do all they can to pay off their debt as quickly as possible. Understandably, consumers may consolidate debt because they cannot meet the total amount in minimum monthly payments on all of their various credit obligations, but meeting a payment that is higher than the minimum monthly payment on their debt consolidation loan could lower overall cost related to interest as it can, obviously, help consumers get out of debt faster and, again, put them in a position where they are debt-free and potentially in a position to begin the bad credit repair process.
One of the main reasons that advisers are hoping students try to avoid college loan debt is because this type of debt has surpassed credit cards as the number one debt obligation that many consumers face and, since credit cards can easily be abused by many consumers, this is quite a shocking finding, especially since there are options that students may use outside of acquiring a loan. Financial aid counselors at universities, in high schools, or online may offer advice to students who are still seeking their financial aid assistance, but it needs to be understood that students can find themselves in a very difficult position if they settle for loans without exploring all of these options for free assistance, as the cost of attending some college and university degree programs can be quite substantial and create a situation where students will be repaying these debts for years to come, or worse, end up defaulting as a result of being unable to meet these costs.
As of 2010, outstanding federal and private student loan debt totaled nearly $760 billion. Only 40% of this amount is being repaid; the rest of it was in default or deferment (meaning payments and interest are halted), or in forbearance (meaning payments are stopped while interest still accrues). Tack on rising costs at most colleges across this fine land of ours — coupled with a “recovering” economy — and it’s really no surprise students are taking out more private loans… or the infamously unpredictable adjustable rate loans, which took down housing.
As of 2010, outstanding federal and private student loan debt totaled nearly $760 billion. Only 40% of this amount is being repaid; the rest of it was in default or deferment (meaning payments and interest are halted), or in forbearance (meaning payments are stopped while interest still accrues). Tack on rising costs at most colleges across this fine land of ours — coupled with a “recovering” economy — and it’s really no surprise students are taking out more private loans… or the infamously unpredictable adjustable rate loans, which took down housing.
