Now that the student loan debt has reached an average of $33,000 for students that graduated in 2014, some are using creative methods to bring it down. So what are some of the ways in which students are borrowing money to knock their student loan debt down? Here’s a look at some of the ways.
Home Equity Loans
With the housing market still trying to rebound from the bubble bursting, interest rates are becoming much lower on home equity loans. For this reason, some students have been able to receive a home equity loan to completely pay off their student loan and take advantage of the low rates.
However, this can be a large risk since home equity loans aren’t as easily forgiven as a student loan and the payments each month can be much higher. Always consult a financial expert before using this route.
401k borrowing can be easy, but it’s not advised that you empty it out so early in your life to pay off a student loan. It’s easier to leave the money in the 401k so that it continues to grow and you will be taxed for taking out any amount as it counts as income.
Some have received offers for a private loan in which their interest can be lower than even that of a Federal Government loan. It’s rare to see unless you have tremendous credit, but it’s possible. Again, a student loan has more of a chance for being forgiven if you work in some of the right fields.
Others have even asked their friends and family with extra money. For a reliable person, this can help both out since one has no debt listed on their credit history while the other can make money on interest. This is a huge gamble, though.
It’s easier just to pay your student loan on time and over the minimum if you have the needs. Some want a quick fix to eliminate their student loan debt, but the standard repayment is the suggested route.
Before committing to more debt, fill out the form on the right for more information on student loans from the American Financial Benefits Center today!