How to Manage Financial Debt From Law School

First, Minimize Your Financial Debt Prior To Entering Law School

Your Student Loans are going to be a major financial obligation for you once you’ve earned your degree. Do what you can to ensure that they are among the only financial obligations you have in your fledgling law career. If you have credit card debt, do what you can to get rid of it. Credit card debt is never good, so it might even be worth forestalling entry into law school if you can rid yourself of the high interest of credit card debt with your current job. While credit card debt is the worst, any other debt you might have should be taken care of as well. Try to get that slate as clean as possible and your credit score as high as possible. You will thank yourself later.

Are There Any Scholarships For Which You Are Eligible?

Do some research in your application process. There are monies available for law school students, and if you qualify for any merit-based aid available, you should apply for it as soon as possible. Another great way to manage the financial debt from law school is to make sure you’re taking on as little as you possibly can.

Talk To Some Experts Before Borrowing

You have a wide array of lenders from whom to borrow, from the government to private lenders. All of these options can be overwhelming. Make an appointment a Financial Aid counselor to go over what the merits of the various lenders are. Do what you can to get the best interest rates. You will save yourself a lot of money when it’s time to repay your loans.

Borrow As Little As Possible

Surely starving students really should not starve, but you should also strive to live as frugally as possible in law school. You might have some ideas about what you think you can get paid after you earn your degree and pass the bar, but you don’t know for sure. Again, the best way to manage the financial debt from law school is to keep the amount you’ll need to repay as manageable as possible.

Have A Plan For Repayment In Place Before You Graduate

You will have six months after you graduate called a grace period. During this time, no payments on your loans are due. However, this time will fly by. Do the best that you can to secure employment before you leave school so that when the grace period is up, you have a way to begin sending those payments in on time.

Consolidate For The Best Rate

You will probably take out multiple loans, and at some point, you should consolidate them. You can only do this one time, so you should probably consult with an expert about when the smartest time for you will be to do so. When you consolidate, you lock in your interest rates and minimize the interest you’ll pay over the course of your loan repayment.

Amber Smith
http://www.articlesbase.com/college-and-university-articles/how-to-manage-financial-debt-from-law-school-84826.html

This entry was posted on Thursday, September 17th, 2009 at 8:20 pm and is filed under Financial Aid. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to “How to Manage Financial Debt From Law School”

mathwhiz454 Says:
September 17th, 2009 at 8:20 pm

Who would I see for general financial and debt repayment advice?
I just graduated college and very soon I have to pay back my school loans. I want to look into consolidation, but I don’t know if it’s a good option and how to even consolidate. I want to know my options. I also want advice about future education investments as I’m going to further my education. Besides that, I just want general financial advice about how to manage my assets, being a recent college grad with a temporary job.

Who would I see about that? What’s their title? What do I look up in the yellowpages?

Live Like No One Else Says:
September 18th, 2009 at 1:22 am

You need to contact a Certified Financial Planner (CFP)
References :

Jeanne R Says:
September 18th, 2009 at 1:24 am

Please do not consolidate. It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. There is a better way.

A. Have a garage sale and sell anything that you no longer need or want.
B.Get a temporary part time job, if you have one, get another. The holidays are coming and there will be plenty of temporary jobs available. It is better to have a no fun year or two than a no fun decade.

Here is a plan that can help you. If you work the plan, the plan will work for you:
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don’t even have to worry about it. You must cut your spending and live on less than you make.

2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment

Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment

Debt #1: paid off
Debt #2: paid off
Debt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

You can do it and it isn’t as hard as you think. Just follow the plan.

References :

DM Says:
September 18th, 2009 at 1:26 am

I work for a company that helps people pay off their debts in 1/2 to 1/3 the time without consolidation loans.

You can get a free analysis to see if you qualify and it will tell you how long it will take to pay off all your debts. They never ask for account numbers or social security infomation, just the amount and interest rates. They are rated highly with the Better Business Bureau and just won the Ernst & Young Entreprenuer of the Year Award for its region in Financial Services.

If you qualify the program will analyze your income coming in and money going out every day/month and tell you the quickest way to pay off your debt.

Go to http://www.moneymerge.designingfutures.tv

Later down the road a financial planner helps you buy and manage your assests. Make sure they get paid a percentage and not a commission on every time they sell you something. Do research on them first before deciding on one.
References :

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