If you’re having trouble maintaining your student loan payments, a deferment or forbearance may give you some breathing room while you work to regain your financial footing.
Both offer a temporary reprieve on student loan repayments, which is important since student loans are rarely dischargeable in bankruptcy.
This includes federal and private student loans as well as credit card debt and money borrowed from family members.
Federal student loans are generally the most attractive loan options due to their low and fixed interest rates and flexible repayment plans.
There are many ways to consolidate your credit card and other debt, such as with a 0% APR credit card, a home equity loan or a personal loan.
A federal Direct Consolidation Loan has a fixed interest rate based on the average interest of your federal loans rounded up to the nearest one-eighth of 1 percent.
Others succeed because debt consolidation is part of a bigger plan to gain control over their finances.
So the first step in debt consolidation is simply to consider whether it will actually work for you.
Consolidation works best as part of a larger plan to become debt-free; it shouldn’t just be a way to buy some breathing room.
If you are consolidating debt just to get a lower interest rate without really knowing how you’re going to pay the debt off, then you are simply moving the problem around instead of facing it.