Student Loan Debt
Most Canadians opt for student loans to help finance their college or university education. The National Student Loan Centre asserts that it takes an average of 9 years for Canadians to repay off their student loans. Media outlets indicate that as of January 2018, the Canadian student loan was topping $25,000. Therefore, it’s becoming increasingly crucial for every graduate to implement an effective debt repayment strategy.
In some cases, joblessness, unexpected life events, and the changing economic conditions affect their ability to repay these student loans. Note that your student loan and a student line of credit payments are part of your credit history. Thus, late loan repayment or failure to pay can negatively affect your credit score.
If you have been struggling to pay off your student loan, here are some of the viable debt relief options.
Debt repayment assistance plan
The repayment assistance plan is a viable option to lower the amount you pay monthly. To qualify for RAP you must be living in Canada, it has to be six months since you completed your learning process at school, and your student loan must be up-to-date. For more information about RAP, check the Government of Canada’s official website.
Revision of terms of the student loan
During the revision of terms of the student loan you may be allowed to extend the time it will take you to complete your student loan up to 15 years. This option will make your monthly loan repayment amount lower than previous installments. However, you will end up paying more interest since it will take you longer to repay the loan in full than the usual.
File a consumer proposal
If it’s challenging to repay your student loan and you have been out of college or university for 7 years or more, consumer proposals Toronto can help. It will combine all your unsecured debt payments into a single monthly installment and offer you a reasonable timeline to repay your debts. For example, if you have two credit card bills and a student loan, a consumer proposal will combine all these debts and set a single monthly payment within a specific timeline.
File for bankruptcy
The thought of filing for bankruptcy can result in stress if you’re considering this option. However, if you are struggling to pay your student loan, it’s imperative to understand that bankruptcy isn’t the only option. A licensed insolvency trustee can take you through all the viable options and help you choose the best debt relief option that suits your financial status.
In some cases, you will realize that filing for bankruptcy is the only option. Here are circumstances under which bankruptcy is the best option.
- Currently, you owe more resources to creditors than you’re earning
- You are unable to pay all your bills and the monthly debt installments without getting more credit
- One or more of your creditors are garnishing your wages
- You are seeking debt relief and start afresh financially.
You no longer need to struggle with your student loan repayment. Any of the options discussed in this article can help.