Consolidate Federal Student Loans

Step1

Contact Your Lender: Although as a general rule the traditional lenders are not consolidating student loans, it still doesn't hurt to try. Call your lender today and ask about low annual percentage personal loans or even low interest credit cards. With low credit card annual percentage rates (APR) you might even get a similar rate.

Step2

Federal Direct Consolidation Loans: If you google search "Federal Student Loan Consolidation" one of the first sites you will find is www.loanconsolidation.ed.gov - the federal website for federal student aid. If you select "Borrower Services" it will take you to the federal consolidation website. It takes about a month to get a response from the FSA, but it is the only agency that is currently consolidation the loans.

Step3

What if I can't get the loans consolidated?: In a few instances it may be impossible to consolidate your loans, so what can you do if you just can't afford the payments at this time. First you should contact your lender and simply tell them it is too much to repay at this time (cite your reasons). Many times they will reduce your payment or extend the life of the loan. A second option is to place the loans in forbearance, which allows you to defer payment for a set amount of time until your financial situation improves. A third option is to return to school at least part-time (6 units). This can be done at a junior college or a local university, and is not dependent on what courses you take. This option will allow you to defer your loans without penalty, as long as you are in school.

Avoid Using Credit Cards

Step1

Remember that every time you swipe a credit card, you're borrowing money you don't have, and digging yourself further into debt. Look at your credit card and repeat it to yourself, over and over again, until it's the first thing that comes to your mind whenever you see that card in your hand.

Step2

Scale back to one card. Close all the other accounts, and cut up the cards. Yes, closing several accounts at once may ding your credit score a bit, but if you're going to be living a debt-free lifestyle from now on, that little ding isn't going to make a difference. Credit scores only matter when you try to borrow money you don't have!

Step3

Leave your one credit card at home. It's too tempting to use it if it's immediately available in your wallet. Your credit card should only be used when you need to make an immediate purchase (like an airline ticket), but need time to transfer the money to your checking account (from a savings or other account). It should NOT be used to purchase items you don't have the money for! After using your card, immediately transfer the money you need and pay it off. Don't wait for interest to accrue.

Step4

Manage your money with an online tool such as Mvelopes, where you can see all of your accounts in one place. Log on every day to balance your checking account transactions and schedule bill payments, so you know exactly how much money you have available for each category (gas, groceries, clothes) at any given moment. See my article "How to Manage Your Money Online" for more info.

Step5

Use cash or debit card only. Now that you know exactly how much money is available, you'll be more likely to stay under that limit. You know what this means, though. When the money runs out, STOP SPENDING! If you use cash or debit only, you'll have no choice but to be more careful and deliberate about your spending.

Step6

If you're having trouble learning how to curb your spending, put cash into designated envelopes in your wallet or purse, and leave your debit card at home (to prevent overdraw and impulse purchases). When your grocery money envelope is empty, you have to stop, period. Studies have shown that the action of counting out dollar bills and handing them over is psychologically more painful than swiping a card, which is why you tend to spend less when using cash.

Step7

Attend a personal money management class like Dave Ramsey's Financial Peace University to give you a practical plan for eliminating debt and building wealth, and help keep you inspired, educated and accountable.

Step8

Get rid of tempting credit card offers in the mail. Log on to www.optoutprescreen.com and follow the directions to opt out of unwanted credit card offers and other financial junk mail.

Step9

Ask for help. If you still cannot seem to control your spending and impulse purchases, get whatever help you need, whether from a financial advisor or even a therapist who specializes in compulsive behaviors.

Improve your credit score during a financial hardship

Step1

Gather all of your bills.
Take a good look at them without crying.
learn these simple rules of importance.

Step2

Do not pay the bills that nag you and call you more just because they are nagging and calling. Those are usually the bills that have no collateral and cant take anything back from you. an example would be like a gym membership or credit card...
First only focus on what can hurt you more. Those are your mortgage, car loans...

Step3

make sure you call all your loan companies and explain to them your situation. Not picking up the phone and avoiding them is the easiest thing to do but the worst. (believe me I know). No one wants to admit they are struggling, but honestly what is the worst they can say to you? Tough luck, Pay up? No.. Believe me, they appreciate you letting them know because it seems you are concerned about paying it and you are not avoiding it.

Step4

Sometimes, when you talk to credit card companies after missing a payment or two, you can speak to them and ask them to lower your interest rate for you and maybe set up a payment plan that is much less than your minimum until you get on your feet. That may be documented on your credit, but it is better that non payment being documented.

Step5

Any monies you have, ration them out so you have some for daily life and some for your bills. Do not give up responsibility just because you have a small set back. Dont be afraid to ask for help as well, need be your family, the government or what ever. keep in search of a job to get you back in gear.

Step6

Downgrade the service in your cable, phone, cell phone, internet, or any other luxury. try to save anywhere you can.