Career Planning- Can Default on Student Loans Hamper Your Future?

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College education in America is becoming more expensive with each passing day. However, this doesn’t stop students applying for degree courses in their favorite field of study.These individuals feel taking this step is necessary.It acts as a catalyst in helping them pursue a career of their choice once they graduate. At the end of the day, almost all of them aspire to secure top leadership positions in prominent companies.Otherwise, finding a good job which offers a lucrative salary can be difficult. The last thing they want is to be dependent on welfare benefits from the government. This is the reason why they don’t think twice about securing student loans from reliable financial institutions.

Why do students default on their loans?

Individuals applying for a student loan to finance their college education assume they can repay their debts. The thought of defaulting on their dues never crosses their mind while studying hard. However, prominent financial experts say recent research in this field reveals a startling fact. Approximately, one billion individuals fail to clear their outstandingdebts even after graduating. Many of them feel this figure is likely to increase in the coming years. On top of this, they face a harsh reality when searching for a good job. The employment market is becoming very competitive. Securing top leadership posts in creditable companies can be a tall order for them.After all, many of these organizations are downsizing because of the state of the economy.

These professionals state the followingthree important reasons why studentsindebt before the onset of their careers:

  1. Peer pressure

The first day in college can be a daunting experience for many students. Many of them try to be very popular among other freshmen in the classes they attend. They end buying expensive items with their plastic money to impress their peers. However, these individuals soon realize they not in a position to repay their outstanding dues. This puts immense pressure on their finances. As a result, they fall into a vicious cycle of debt within a short time.

  1. Lack of planning

Many students don’t prepare a proper budget before pursuing their education in college. These individuals depend on their credit cards most of the time to pay for what they need. In doing so, they automatically attract high-interest rates on their outstanding balances. The problem becomes even worse when they can’t repay their dues on time. They then end up accumulating late fees, additional interest charges, and penalties. This further increases their debt even before the start of their careers.

  1. Selecting the wrong loan scheme

Most students going to college are unaware of how to select a proper loan scheme. Many of them fail to understand the terms and conditions their private financiers impose. Most of these lenders aren’t open to alternative modes of repayment.Almost all of them also charge a very high rate of interest on the money they provide. This makes it difficult for many of their borrowers to clear their outstanding dues on time.No wonder these individuals are deep in debt by the time they graduate.

How does debt settlement help students?

The specialists go on to reassure students in debts that there is a way out of this situation. They can get their finances back in order before starting their careers. For this, they should opt for suitable debt settlement schemes. It is prudent on their part to opt for the policies of credible financial organizations. They should hesitate to browse through the online debt settlement reviews of such establishments on the internet. This can give them an idea of the reputation of these concerns in the market. However, the experts warn these individuals to replicate the same mistake as they did with student loans. They should always thoroughly read all the relevant policy documents. Only then should they take any decision.

The experts explain under a debt settlement scheme; students don’t repay their entire outstanding dues. They enter into negotiation with their lenders to make a lump sum payment to settle the debt. This money generally represents a certain percentage of what these individuals owe such financiers. The creditors them agree to waive off the remaining portion. Some of them even consider rescheduling their clients’ remaining amount at a lower interest rate.This offers a win-win situation for everyone. By opting for this course of action, the borrowers can enjoy the followingtwo important benefits:

  1. Avoiding bankruptcy

This is perhaps the most important reason for the popularity of debt settlement schemes among students. The only other option open to them is to file an application for bankruptcy. However, taking this step does more harm to them than good. It can ruin their credit score even before they start to pursue their careers. They won’t be able to erase this indelible mark for the next ten years. Even after graduating, many employers are going to think twice about hiring them. This is certainly not what they want.

  1. Becoming debt-free with a very short time

With a debt settlement scheme, the students can clear all their outstanding within a short time. This is the first stepping stone towards helping them reorganize their finances. These individuals also get the opportunity to start their careers with a clean slate.They don’t have to worry about getting phone calls from officials of collection agencies.This helps them to focus on advancing in their professional life. This is a fact which many of them can’t afford to dismiss outright.

All students want to complete a graduate course in a field of study of their choice. They believe taking such a step can give a boost to their careers in the long-run. For this, they may have to take a loan finance their stay at college. However, these individuals need to repay their dues on time. Otherwise, it won’t take long to find themselves in trouble. Fortunately, opting for suitable debt settlement schemes can help them get out of their mess. They just got to look at the above two important benefits of taking this course of action. They’ll come to realize it is the right decision to take.

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