When is it time to talk to a financial advisor about student loans? – AOL | NutSocia

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When should borrowers ask for help when struggling with student loan debt? To learn about the key moments in the student loan lifecycle when borrowers should seek professional help, GOBankingRates spoke to Chris J. Gaddis, MBA, Managing Partner at Shokunin Financial. We also spoke to Erik Kroll, Certified Financial Planner and owner of Student Loans Over 50, and Jake Cousineau, author of “How to Adult: Personal Finance for the Real World,” about telltale signs it’s time to start dating Expert to speak student loan debt.

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Before applying to colleges

Gaddis said there is an argument for speaking to a financial advisor about student loans before applying to colleges.

“Many students don’t consider the long-term implications of the school they choose and the debt they take on,” Gaddis said.

Speaking to a financial advisor before applying to colleges can allow students to better plan their educational options. Gaddis gives the example that some students might consider going to government schools and then, after two years, transfer to a private university. This can help reduce overall student debt by thousands of dollars.

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Before accepting a financial aid package

If a student has decided to apply for college enrollment, remember that you may receive a refund with your financial aid package. A federal student aid refund is a FAFSA refund check that can be issued to students receiving federal loans if the total loan exceeds the cost of tuition, fees, and room and board.

“Often students get refunds with their aid package and end up taking on thousands of additional debts that they spend on beer and food,” Gaddis said.

The FAFSA recommends that money issued by a FAFSA refund check be spent responsibly. If you’re not sure what to do with a refund check, talk to a financial advisor about spending the money wisely.

After the closing and before the start of the repayment

The two biggest factors that affect postgraduate student loan debt are your career choices and your repayment schedule.

Both determine how long and how much of the student loan debt borrowers can repay. Student loan debt is also non-bankrupt, meaning loans can hurt borrowers during their most important earning and saving years in retirement.

“A financial advisor can help develop a repayment plan and put it into action,” Gaddis said.

When the debt is close to or greater than 1 times the borrower’s income

When the student loan debt is close to or greater than 1 times the borrower’s income, Kroll says that’s a good time to talk to a professional.

“A student loan expert can really help with forgiveness strategy and income-based repayment plans,” Kroll said. “When a borrower is addressing these issues, a financial advisor can really help optimize their lending strategy.”

When the borrower is overwhelmed with credit

Feeling overwhelmed by student loan debt is a common feeling for many student loan debtors. Cousineau often said that these feelings come from three places:

  • An income that makes it difficult to repay student loans

  • Lack of discipline and budgeting skills

  • A tenuous understanding of their credit and general personal finances

The good news is that almost all student loan borrowers can tackle their loans despite feeling overwhelmed if they take the time to understand them.

Cousineau said student loan borrowers should understand the specifics of their loans before seeking professional help. This includes the following areas:

  • Loan terms, including principal, Annual Percentage Rate (APR) and amortization

  • How much the borrower has to pay each month to pay off the debt in a reasonable amount of time

  • What the borrower’s repayment options look like

What if you understand your loans but still feel overwhelmed or struggling to make payments?

“If you understand your loans, have a responsible budget, and are still not on track to ever paying off your student loans, it’s probably time to talk to a professional,” Cousineau said.

Conduct due diligence when looking for a consultant

Don’t work with someone who charges specifically to help with your student loans, especially on an ongoing basis or when they say they will make payments on your behalf. Also, remember not to give anyone access to your login credentials.

“You should not allow consultants or companies to take your credentials with you. It’s too easy for them to change the credentials for you and they make it really hard for you to undo things,” Kroll said. “Any company that lends you or claims to make the payments for you is also a red flag.”

If you’re looking for a financial advisor to help you with your student loan debt, remember to do your due diligence. Kroll said the person you’re talking to must have specific knowledge about student loans. Some borrowers may choose to work with a Certified Student Loan Specialist (CSLP) or other financial advisor with a strong student loan background.

Borrowers can continue to learn about their student loan debt even while working with an advisor. Free tools and resources to help you on your repayment journey are available on the website of Federal Student Aid, an office of the US Department of Education.

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This article originally appeared on GOBankingRates.com: When is it time to talk to a financial advisor about student loans?

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