Student loan repayments are the first thing that haunts students as soon as the university term gets over. After a long overdue, it is finally the time to pay what you ought to.

At this stage, a graduate is confused about how to pay student loans.

What if he could never reach the income threshold to pay the student loans?

Even if he catches attractive job opportunities, he finds it hard to manage one amid the shifting lifestyle and new liabilities. 

If you are struggling to keep up with student loan payments, you might feel overwhelmed about what may happen to your costs.

The consequences of defaulting on student loans can severely damage your credit score and financials. However, there are some options that you can leverage to take charge of your student loan payments and repay loans hassle-free.

5 Things to Do If You Cannot Pay Student Loan

If you fall behind on student loan payments, the government could slash additional benefits or grants you may receive.

You must not plan any significant investment before repaying the student loan debt. It requires you to make some tough choices on the financial front. 

Here are some options you have if you cannot pay student loans in Ireland:

1)      Contact your student loan provider to discuss

It is the first thing you must do. The loan providers profit if the borrower pays the money on time and in full. In addition, they would not like to lose the payment.

It lies in their best interest to be helpful to the borrower. Check out the feasible options for your financial situation.

The loan provider may provide you with repayment options for your needs.

You can choose the repayment schedule as per your income. The amount will be deducted from the account every month on a fixed date.

However, always discuss the financial situation with the loan provider, not anyone else. It could sincerely impact your finances and loan repayment abilities.

2)      Check out student loan deferment

There are restrictions to applying and qualifying for student loan deferment. Not everyone using it can halt payments for a fixed time.

However, earning a decent income may defer the payments for up to 12 months.

Repayments can be deferred if your income is below the threshold. You never have to pay until then. If your gross income is below €35,092/year or €2924.33/month, you do not have to pay anything to the lender.

Deferment allows you to halt payments on the principal. It eventually stops the interest from accruing on loan. It is different from other loans. As on other loans, interest costs never stop.

Here are some conditions under which you may qualify for student loan deferment:

  • Is suffering from permanent disability
  • Facing an economic hardship
  • Is suffering from total disability
  • Works in the healthcare sector
  • Is unemployed
  • Is currently schooling
  • Was a victim of identity theft
  • Is performing community service
  • Left school but never got a refund

3)      Identify the Student loan Forbearance possibilities

It works differently from student loan deferment.

In forbearance, you either get permission to stop making payments for a set time or reduce the overall loan amount payments.

However, the interest costs will still be there.

Here are some reasons that one can easily leverage student loan forbearance:

  • Unforeseen health or financial issues that disrupted the lifestyle
  • A shift in the employment process
  • Monthly payments are 20% more than the total monthly income of the borrower
  • Inability to pay the student loan within 10 years

Loan forbearance is more accessible to qualify for than student loan deferment.

4)      Seek student loan cancellation

Student loan cancellation is possible in highly extenuating circumstances.  One such situation is the death of a student.

The person or the relative must inform SLC (Student Loan Company) about the same with proof. The proof may be the death certificate or the coroner’s certificate verified by the coroner.

Another situation where one can apply for student loan cancellation is – permanent disability.

The person sharing the inability to work or move can waive off their student loan. You just need to contact SLC and provide proof of disability from the specialist’s handling the case.

The student alone cannot take the lead; the SLC requires a third person to deal with the proceedings.

The authority accepts the documents and other proof from the person only. The third party dealing with the case must be a close associate of the student, and it must be in his power to do so.

5)      Student loan debt consolidation

Student loan consolidation can be a good idea to save on your repayments. You can achieve it by:

  • Lowering monthly repayment amount
  • Lowering the interest rates
  • Extending the loan term
  • Removing the liabilities and keeping good

Getting an extended loan tenure means more interest rates. It is true with other loans.

However, with student loans, you can secure a low-interest rate. Hence, it could be a worthwhile option if you cannot pay your student loan.

There are other reasons that you may want to tap these loans:

  • You are currently in default, and you want a new loan.
  • Qualify for new loans if you want to continue schooling.
  • You do not have all direct-debit-based loans and want to shift to an income-based repayment plan you lack with your current lender.

Want to pay other pending loans to free up money?

However, qualifying for student loan debt consolidation requires the following:

  • Excellent credit score
  • Stable income proof
  • Consistent income

Not everyone can qualify for the same.

You here can check personal loans in Ireland to bridge a small amount. It is only ideal if you are nearing the loan-term end and need some amount to complete the payment.  

These loans are unsecured, just like student loans. However, the interest payments continue until you pay these. These are affordable ways to clear your dues quickly. Do so only if your financials abide.

Bottom line

Student loans can be stressful while dealing with repayments. But if you are having a tough time, there are options you can check out to clear loans or deal with non-repayment. Contact your loan servicer provider at the earliest. Non-repayment can affect your credit and could lead to default.

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