Higher interest rate debt Must Go First
Whether to pay off or invest is a question to be answered at a later date if the student prioritize its loan payment schedule. The loans with high interest rates must first settled. Most noted debt consolidation and management experts agree that a first need to make provisions for the settlement of debts with the highest rates of tax. Currently, the interest rate for federal --> Student loans is at its lowest level in the last 30 years. Therefore, the recent graduates have the opportunity to decide their loans at low interest rates, loan term extensions and can request refunds for postponement. Recent tax law changes also have provisions for the exemption from tax on interest paid on student loans.
Joining the forces can help eliminate debt
However, eliminating debt may sound simple, but can be very complicated. There areOptions available that can help students reduce their debt. The students can then consider the armed forces, ie the Army, Navy, Air Force, Marine Corps and Coast Guard, which provide a good educational advantages. At the same time, the students must decide on some effective Payback Loan Program. One of the better programs PAYBACK is offered by the American Army, which pays back up to $ 65,000 worth of loans over a period of three years.
U.S. Peace Corps is another excellent choice. InIf a student has an outstanding Perkins Loan, then 15% of the loan amount is paid each year from active service in the U.S. Peace Corps. At the end of two years of service 30% of the loan is eliminated. In the case of other government-guaranteed loans, students are entitled to loan payments during their activities are free to move in U.S. Peace Corps. Thus, Peace Corps can be a viable alternative for the reduction of debt and at the same time updating theresume.
Pay off or invest
Counseling services organizations, advising on loans for students agree that investments can be made each month with the money saved by the consolidation of loans. A student may take the benefit of the sharp decline in interest rates by rapid consolidation of multiple loans and thus save money that he can continue to be used toward loan repayment. He can even as an investment of surplus funds in some meaningfulVenture.
Ideally it is best to invest excess funds in companies that has a higher interest rate than the rate paid to the student to cancel his student loans on offer. Likewise, it is a good decision if the student would be left open an individual Retirement Account with the excess money after the payment of the loan.
In fact, there is no definitive answer to whether we should consider the investment of cash or not. Inexploit any case, even if the student decides that the funds for the repayment of loans, it is actually a long-term investment protection for existing debt elimination will increase the ability to obtain financing in the future with better conditions.
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