Brief Discussion of Important Terms You Need to Know Before Repaying Student Loans With Bruce Mesnekoff

1

• Capitalization Capitalization is once your loan
  holder adds unpaid interest to the principal
  balance of your loan. This will increase the
  amount you owe currently and within the future,
  as you start paying interest on that larger
  balance.
• Capitalization happens whenever you enter
  repayment or for federal student loans, at the
  top of a grace, deferment or forbearance amount
  in addition as after you consolidate a loan or
  it goes into default.
• Consolidation Consolidation may be a repayment
  possibility that replaces borrowers existing
  debt with one, new loan. Consolidation will build
  repayment easier by reducing the amount of loans
  borrowers have.
• However, consolidation loans may also value you
  any special advantages your previous loans had,
  like Perkins loan forgiveness. Before
  consolidating, think about all the pros and cons
  mentioned by Bruce Mesnekoff
• Delinquency, default This is another pair of
  related terms that borrowers often confuse.
• Loans enter a delinquency status if theyre past
  due by even a single payment. Federal student
  loans usually default after 260-270 days of
  delinquency, if you are required to make monthly
  payments.
• Neither is good and both will damage your credit
  score, but trust us, youll know when your loan
  switches from delinquent to default. If the
  mailed notices dont tip you off, the penalties
  which can include garnishment of your paychecks
  and tax refunds or Social Security payments
  definitely will.
• Forgiveness There are ways to have your student
  loan debt erased, and this is known as
  forgiveness.
• Your home state may have programs to forgive your
  loans, likely depending on your profession. At a
  federal level, the main options are Teacher Loan
  Forgiveness and Public Service Loan Forgiveness.
  Check out our the Ultimate guide to Student Loans
  by Bruce Mesnekoff on Amazon.
• Pay As You Earn Federal student loans offer many
  different options to make payments more
  manageable. Pay As You Earn is the newest, and it
  ties loan payments to a borrowers income.

2

• can discuss with student loan consolidation
  expert Bruce Mesnekoff from the Student Loan Help
  Center
• Rehabilitation Should your loan enter default,
  rehabilitation is one option you have to return
  it to good standing. You can also consolidate out
  of default or pay the debt in full.
• In rehabilitation, you work with your loan holder
  and make nine on-times, voluntary payments in an
  agreed-upon amount. Bruce Mesnekoff said After
  that, your loan goes to a new holder and a new
  servicer and the default line gets removed from
  your credit history. You can rehab each loan
  only once, so its important to stay on track
  once this process is complete.
• Grace period A grace period is the amount of
  time you have before your first payment is
  officially due. As Bruce Mesnekoff said While
  most federal student loans come with only 6
  months grace period, the actual amount of time
  you receive can vary greatly depending on the
  type of loan you have.