Help with Defaulted Student Loans: Dos & Do Nots

The amount of the total defaulted student loans has reached such a high figure that the lenders have taken stringent measures while granting the loans to the borrowers. The problem has escalated to the highest level during the recession phase. But the strict policy is still in force to filter out a good number of loan applications. It is not that you earn a defaulter status after missing one or two payments only. If you are unable to pay off the periodic installment for a consecutive period, then only the pending dues will be categorized as the defaulted loans.

Help with Defaulted Student Loans: What You Must Not Do

Most of the time, the defaulters do not take any initiative to accost the lenders and explain the problems for which they could not meet the monthly payment. They are simply in fear that this initiative may push them into further troubles. Some of the defaulters also try to throw dust in the eyes of law but at the end become futile in their effort. There is no way to evade the due payments though there are several avenues to help with defaulted student loans and let us have a look at them.

Help with Defaulted Student Loans: What You Must Do

The first and foremost task for you is to strike a conversation with your lenders and explicitly tell them about your plight. Contrary to the popular belief, most of the loan providers are quite reasonable and come up with feasible solution to help with
defaulted student loans problem. If at present you are literally penniless, then opt for the loan deferment policy. It is the perfect solution in your situation. By deferring the payment, you only reset the period from which the loan repayment will kick off. In case of multiple loans, loan consolidation is the most suitable option to drown the problems of defaulted student loans.

Lifetime Annuity to Safeguard You till Last Day on Earth

The interest rate is plunging. It is definitely good news for the debtors but not for the savers. A cut in the interest rate may inspire the investors but the savers will not feel enthusiastic. They may even withdraw a part of their saving due to the sluggish growth rate of the saved amount. In such an event, they have to either bite off their capital or invest into the stock market. The first option will be rejected outright by the majority of the individuals. As far as the second option is concerned, many are averse to take such a high margin of risk. There is another alternative for this brigade and it is to make investment into the lifetime annuity.

Annuity is what safeguards your income as well as makes it grow with the passage of time. When you purchase a lifetime annuity, you invest a hefty figure and in lieu of that, get a series of monthly income till the last breathe of your life. The monthly payment is a fixed figure and determined in times of buying the annuity. Lifetime annuity is a good option to ensure a better tomorrow as you can rely on a pre-set figure of monthly income instead of interest rate.

The added advantage of buying a lifetime annuity policy is that a part of the yearly income payment made by the insurance company is treated as the return of the annuitant\u2019s money and therefore exempted from income tax. When you invest into a lifetime annuity, it may make a considerable reduction in your estate value to be enjoyed by your heirs. But such a possibility can be offset by a reduction in the inheritance tax due. One feature of the lifetime annuity may sound to be disadvantageous and that is after the demise of the annuitant, no benefits are provided to the inheritors.

Hard Money to Meet Urgent Needs

The ordinary persons may feel amazed to know that money can be hard too. Hard money is what can be availed on demand. Such a facility is not provided by the traditional lending institutions. Such loan is on offer by the private lenders only to meet the immediate needs of the businessmen especially the real estate developers.

Hard money is intimately related with the real estate business. The investors in this field are often in dire need of huge money supply within a very short time frame. Approaching the traditional loan providers will of nil help as the official red-tapes delays the loan processing. If they wait for a long time, they will miss the opportunities. So, taking help of the hard money lenders is the only solution for them to fulfill their urgent monetary needs.

Due to the high rate of defaulting loans, the conventional lenders have adopted defensive measures to avert the risk of pending dues. So, the rules and regulations related to granting the loans have become more stringent. Several factors are scrutinized prior to loan approval. So, getting loans has become harder nowadays. This fact has attributed to the thriving of the hard money market.

For the hard money lenders, the value of the real estate property is the only consideration while providing the loans. The volume of the loan is also based on the real estate value. Definitely, the lenders are taking a big risk by not checking the credit status of the borrowers but they do it to stretch their profit margin. As a greater risk is involved in this sort of lending, so the lenders charge a significantly higher interest rate. That is why, some investors dither a lot in taking help of the hard money lenders. But high return in the real estate business can easily offset the higher margin of interest.