Graduate Student Debt Consolidation is Not the Only Solution

It is not always feasible to consolidate all student debt and sometimes the results are not that useful. There is however an alternative to graduate consolidation that provides the same results and can lower your monthly payments even more.Graduate Student DebtMost student loans repayment is deferred till after graduation. The problem is that though graduated, it is possible that you don’t join the workforce right away and the repayment schedules start six months after graduation with no delays. And even if you do join the workforce right away after graduation, it is still possible that your income does not provide you with the funds needed to afford the payments on your debt.Thus, whether you don’t have a job or suitable income to afford the graduate debt repayment or the payments are simply too onerous and you want to reduce them, resorting to student debt consolidation might seem the smart way to go.Obstacles For Consolidation Though consolidation might seem the way to go, sometimes student consolidation is simply not feasible. If your debt is mainly composed of already consolidated federal student loans, or if your credit score and history won’t allow you to get approved for unsecured consolidation loans, you will probably be unable to consolidate your student debt through regular means and you will need to think about alternatives.Sometimes student debt consolidation is not advantageous because the resulting loan has a higher interest rate than the average of all your student debt combined. This can happen when you have a mix of federal and private loans with a high amount of loans at a promotional rate. Generally it is advisable to leave federal debt aside or consolidate it separately. However, there is an alternative that can provide financing at a reasonable rate with advantageous terms too.As regards to bankruptcy, it is often not a good option as student debt is not dischargeable even with bankruptcy (only if the debt imposes undue hardship). Therefore, you may default on yours but you won’t be able to get rid of it other than by paying it off.Consolidating or Refinancing With Loans Based on Equity If you, a family member or friend can provide enough equity to secure a loan with an amount suitable for canceling all your student debt, you can obtain the same results as with a student debt consolidation loan and often, better terms. Loans based on equity provide high amounts, long repayment programs (it is possible to obtain repayment schedules of up to 25 years) and consequently lower monthly payments that are easy to afford.That way the debtor can obtain financial relief as the available income will increase relatively to the raise of the student debt affordability. This method is not often used but can provide very interesting results and when regular student debt consolidation is not an option, it is our first suggestion.