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Benefits of Government Debt Consolidation

Debt casts a grim shadow on anyone's life and you can't banish this shadow by turning on the lights. Debt is impossible to escape and can really come to affect the quality of life people are able to enjoy. If you are in debt, you're not alone. The current economic crisis, coupled with inflation has left many people maxing out their credit cards just to pay the bills, never mind enjoy their spare time. Fortunately, the government has debt consolidation programs available for students who need help to streamline their monthly debt repayments into one easy-to-manage fund. Debt can be very isolating. If you're afraid of the reaction of your friends and family, try talking to the ones you know have has similar problems. If people haven't experienced debt themselves, they are often the ones who fail to understand how hard it can be to choose between paying rent on time and buying groceries for the week. Try not to let the opinions of other people get you down. Instead, be proactive! Look into debt relief consolidation and work to regain control of your finances.

Government Debt Consolidation - For Students

Government debt consolidation for students works much the same as debt consolidation services you can get from other financial lenders. The loans are available though a range of government programs and are designed to help you repay multiple student loans. Consolidating so that you have one, single payment to make every month (rather than several spread out over the month to different creditors) is a much more efficient way of managing debt. Government debt consolidation reduces interest rates by taking multiple unsecured loans and turning them into one secured debt. Most student debts involve education costs, credit card debt and medical bills. The Education Department assists by settling the original federal education loan and arranging a fresh, consolidated loan for the amount of the old loans. They do not help consolidate any other kinds of debts and the program is known as the Direct Consolidation Loan Program. These programs are designed specifically for students and because of this, they are often willing to work with low income students and have greater flexibility for smaller repayments. Keep in mind that the longer the term of your loan, the more interest you will end up paying in total. Under the Higher Education Act, there are two programs you can look into: the Federal Family Education Loan Programs and the Direct Loan Program. With the former, you're given a consolidation loan you use to pay off your existing student loans. Your existing loans are probably from different lenders, with different terms, different dates of repayments. Once they're consolidated, you only have to keep track of one repayment and you can be much more aware of how much you spend paying off your capital and how much goes on interest.

Types of Government Debt Consolidation

There are four different types of plans to choose from when it comes to government debt consolidation. There is a standard plan, and extended payment plan, a graduated payment plan and an income contingent repayment plan. Whichever suits you best, each is invaluable for anyone who is trying to juggle student debt and all have flexibility to better suit your individual needs. For more information you should contact the education department in your state and discuss your options. It's important to investigate all options when you decide to address your debt problems. If your debts are smaller you will probably find it easier to get a personal (unsecured) loan, while if your debts are more significant you will have to get a secured loan - these are most commonly mortgages. It's also important to keep in mind that interest rates on personal loans are higher than on secured loans.

Debt Relief Consolidation

Most of all, if your debts are out of control, you need to pinpoint the reason you fell behind in the first place. Debt relief consolidation is the first step of addressing a problem but reviewing your spending habits is the first step of addressing the cause. Start a financial planner, which records your income and spending each month. With this kind of record, it's easy to identify where most of your money is being spent. Is too much of your income going on rent? Do you tend to splurge on entertainment on the weekends? Once you know the area you need to cut down on, what are the most practical ways to do so? If you can't move to a cheaper house, can you take in a boarder to help out with the household costs? Can you set a lower credit card limit to control what you spend on the weekends? The key to handling debt is to be aware of what you're spending, where and when. Make a financial plan and make it realistic - that way you'll stick to it!