Private Student Loan Repayment – Easy Way to Pay Back Your Debts
Loan repayment is the act of repaying the borrowed funds to the lender. The repayment takes place through a sequence of fixed payments, which are known as EMI’s, which consist of both interest and principal. These payments are the total amount of money that is repaid to the bank each month. For an individual, loan repayment usually happens every month. There are many ways to speed up the loan repayments of an individual.
If you know you have to make some adjustments to your budget
make sure to discuss these with your lender before you proceed with any action. If they are aware of any impending financial problems, it would be in their best interests to help you keep on making your required payments. If the borrower falls behind on making the required loan repayments, the lenders will have no choice but to contact collection agencies or the authorities to chase the borrower.
Another way to accelerate the loan repayment process
is by using your property for collateral. This could either be your home or real estate properties owned by you. The lender would require a borrower who has sufficient equity value to offer as collateral. This equity will serve as the collateral for the loan repayment. As the amount of repayment gets accelerated, so does the amount of interest to be paid. It would be advisable to pay more than the required monthly amount to reduce the monthly interest payments and increase the principal amount.
You can use a home equity loan repayment calculator
or a home equity line of credit (HELOC) to calculate your required monthly amount. This calculator will allow you to plug in relevant information like interest rate, loan amount, balance, and length of repayment. This would give you a rough idea about how much you need to pay back to the loan provider. While it is true that the loan repayment amount would be considerably higher than what you borrow, you can always use the principal amount only if it suits your requirements and circumstances. It would not be advisable to use the HELOC to repay all your loans. Make sure that the interest and other charges are spread across the amount of loan repayment taken.
The main advantage of using the HELOC
for your loan repayment calculation is that you can pay the loan amount even while you are on the waiting period. You can then use the period to make payments and avoid the late fees charged on penalties and other charges. This way, you can ensure that you do not pay more than the required principal amount paid. However, using a HELOC for a loan repayment with a high APR may not be advisable. If the payment period is for only two to four weeks, then you can consider paying the amount repaid in two months or even less, provided that there are no penalties for early payments.
The key to getting out of the trouble paying back your private student loan
is to negotiate with the lender. If you do not plan to search for other alternatives to consolidate your private student loan, then it would be best for you to discuss your problem with your lender personally. If the lender feels that your financial situation is quite difficult, then they might be ready to offer solutions such as refinancing your loan, lowering your interest rates, or offering lower monthly payments. Before taking any of these solutions, however, you must make sure to consult first a specialist to help you understand the entire process, and your rights are given to you by the lenders.