Dealing with student Loan payments as an unemployed is stressful. You find it hard to save for student loan repayments amid funding for essentials. Thus, one fears skipping it and attracting additional interest rates and penalties.

You may be eligible for forbearance and deferment of your loans. Deferring payment is better as qualifying for forbearance is challenging. Deferment allows you to halt payments for a while and forbearance reduces the amount to pay for some time.

The first thing after analysing the best of these is- applying for unemployment and other benefits that you may qualify for. It would help you cover up some amount if you have a part-time income source.

The blog lists other ways to pay student loans as an unemployed.

Best ways to counter student loan payments as an unemployed

A student may find himself stuck meeting the liabilities after unemployment. Rental payments, utilities, credit card debts, and educational requirements make it impossible to save. However, as they say, “if there is a will, there is a way.” If you want to pay some towards your Student Loan Payments, some solutions may help. Read ahead to know further:

1)  Try to pay at least the interest rates 

If you cannot pay the full repayment, at least try to cover the interest costs. It would then leave you only with the principal amount. The best part is- the principal part remains the same. Thus, analyse the ways you can pay some towards the interest costs.

You can do so by tapping the savings, (minimal), investments, and scholarships.  It would help the lender analyse your situation and grant you more time to pay.

2)   Start another part-time job

When looking for work and handling loans for students, check part-time jobs.

While you may have one, when liabilities exceed, you need to work extra. However, the situation does not remain the same always. You will get better off with time and improve your finances. But now, you must check a few more jobs you can manage within the existing schedule.

 You can earn by dedicating only 2-3 hours to a particular job. Alongside, do not exhaust yourself. It could lead to additional medical issues. You can re-instate a new way to manage finances by shifting it. For example, you can use the savings to manage your utility payments or limit the subscription. In this way, you can save on energy costs. You can dedicate the amount towards the repayments.

3)  Check unemployed loans for help

Yes, these work exactly as they sound. You can get an unemployed loan even if you do not have a regular income. As the name suggests, these loans are exceptionally for jobless individuals. One may qualify for these loans by just providing minimal income proof.

It can be a part-time income, income from rentals, investments (dividends), scholarship, insurance, etc., You can get small loans for the unemployed only if you can provide any of these proofs. It reveals your capabilities to pay your loans timely in regular instalments. 

Thus, if you are behind the month’s payment, you can use it to bridge the student loan amount. Its easy access makes it one of the most popular among the generation. However, if it hampers your personal growth or finances, steer away. Alternatively, these loans prove extremely helpful to knock off an emergency or pay some dues.

4)  Consolidate some debts

What do you usually do to clear previous liabilities in your credit report?

• Do you pay them with a credit card?
• Use an overdraft?
• Wait until another month to budget and pay?

If you use any of these methods, you are doing it wrong. This is because paying through a credit card, overdraft or skipping payments only increases penalties. Eventually, it affects the credit score significantly.  

Instead of using any of these, consolidate loans.

How will consolidating my loans will help?

By consolidating some high-interest loans into a one-payment schedule/month, you can save on interest costs. Moreover, you pay significantly less than previous arrangements. It helps you save more and improve your credit score fast.

You can use the amount you save by consolidating the loans to pay student loans. However, it may not be sufficient. If you had loans like- car loans, home improvement loans or payday, you can pay at least half the sum or at least 1/4th of the student loan debt amount.

Isn’t that helpful?

5)  Tap emergency funds for regular expenses

An emergency fund is the exact one you need right? One usually invests for at least 6 months of savings as emergency funds. You do so to finance the requirements under a job loss.  If you have one, now is the best time to use it for regular expenses.

No, do not cover student loan payments with that. It is not advisable. Instead, you can cover short-term expenses like food, energy, groceries, rent, child’s education. It will help you dedicate a good portion of your income towards clearing student loans.

6)  Seek student loan deferment

You would need to submit an unemployment student loan deferment application to the concerned authority.  With the form, you must provide the below confirmation:

1. Provide documentation that reveals your eligibility for the deferment. It could be a copy of income from benefits from the Department of Labour. Moreover, it must include your name, address, and Social Security Number
2. You must make at least 6 attempts in the 6 months to get full-time employment. You must also be registered with an unemployment agency near your residential place. However, refrain from providing false proof of your efforts to get the job.  It would not help.

However, you may get it in exceptional cases like if you are underemployed. You must be working but not full-time. It implies if you work less than 30 hours in a week the job will not last more than 3 months in a row. 

Even if you meet student loan deferment, you eventually must pay towards it. Thus, you must seek regular job opportunities. To counter job needs, you need sufficient cash upfront. However, you can get one on benefits if you need a loan today from a direct lender for your interview needs. It would help you manage the expenses involved easily. It is the best way to counter one-off expenses quickly.

Bottom line:
Managing student loan payments can be troublesome if unemployed. However, having the right support like government benefits, scholarships, and seeking loan forbearance or forgiveness can help. If you do not get any, use unemployment loans to finance your necessities and save the rest for student loan payments.

The post How to manage student loans if laid off apart from unemployed loans? first appeared on 1onefinance.