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How Retired Grandparents may Pay Off Student Loan Debt Effortlessly?

Posted on August 27, 2013 | in Loans | by

Student Loans - Grand ParentsStudent loan basically helps a student to manage the cost of education without facing any difficulty but the repayment often goes with the grandparents. This is because grandparents often have the inclination to cosign for the student loans for their grandchildren. If you’ll follow the recent statistics, then you may find that after 2005 there is a considerable rise in debt level among people aged between 50 to 59. The student loan debt is obviously a great contributor behind this rise in debt level amongst people who’re nearing the age of retirement.

Balancing Retirement and Debts – How Demanding is it?

While you’re still working and earning on a regular basis, it’s more convenient for you to take care of your financial obligations. Right after retirement, you lose the assurance of regular income and this makes it even more important for you to save for your future. That’s why, after retirement it becomes a bit difficult to manage debt payments along with all the other savings accounts. Of course there are a few solutions for the retirees to deal with student loan debts without missing the other vital financial necessities. Have a look at the solutions below that may help retired grandparents to deal with student loan debts efficiently:

1. Look up to home equity lines of credit: Equity in your property is something which you can use to solve most of your financial problems well on time. The same applies for student loan debt also. Retirees who’ve considerable amount of equity in their property can use it to get rid of debts easily. Of course the usage of equity has to be proper. Otherwise it may create problems in managing the mortgage loan.

2. Make way for some budget cut: Quite obviously increasing savings to pay off debt must. To pay off the student loan debts you need to accumulate enough savings. People often feel it unsafe to use retirement savings for the debt payments. It’s definitely not a wise idea to use retirement savings for any other cause. Still, if the student loan debt is due for a long time, then you must pay it off as soon as possible to get rid of interest rates. Use a portion of your retirement savings to pay off the student loan debt. This will actually help in saving on the interest rate.

3. Encourage to follow IBR: Income Based Repayment plan or the IBR is a convenient option for federal student loans. If your grandchildren have federal student loans to pay off, then encourage them to opt for the IBR option. The greatest benefit of IBR is, after continuous payments for 25 years, government forgives the rest the loan amount. The monthly payment will be decided according to the income level of the borrower. This is really an effective solution for federal student loan debt.

4. Make the most of life insurance loan: It’s definitely a wise step to borrow from the life insurance policy to manage the immediate financial needs. Just check the interest rate properly and borrow a moderate amount. It’s important to go very careful with the borrowing. A careful attitude will make it easy to keep the things well under control.

These 4 effective solutions may help retirees to manage student loan debts efficiently. So, following these solutions is a must when debt free life is the matter of concern.

About Author:

Mr. Collins has been a recognized industry expert, financial advisor and author in debt consolidation agencies and various bankruptcy lawfirms. He offers more helpful tips and information on bankruptcy, student loan consolidation, credit card debt consolidation and many more. For more informaion please go to the facebook/oakview

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