<img src='http://l.yimg.com/bt/api/res/1.2/Qb3.IC1fujdGpUL8kIPpCA–/YXBwaWQ9eW5ld3M7cT04NTt3PTM3NQ–/http://l.yimg.com/os/publish-images/finance/2013-07-02/53b65aa7-05d8-4a44-84cf-aa5ee3fd7094_brown.jpg' width='200px' style='float:left;padding:5px' debt advice />
Maybe you’re too embarrassed to fess up to your issues or you can’t afford a financial advisor. So you might pick up a $20 self-help book or enroll in a $200 debt makeover course online. Save your money. Some of the greatest advice out there can come from the person standing next to you in line at the grocery store. To prove our point, we’ve rounded up 7 truly inspiring stories of real consumers who faced their debt head-on and managed to come out on the other side. 1. Carrie Smith, 28, found herself $14,000 in debt at age 25. She dug her heels in and paid it off in a year. Carrie SmithWho she is: Smith is an ex-small business accountant who dedicates her time to helping entrepreneurs manage and make more money. Her debt wake-up call: “Three years ago … I started thinking about what my life would be like as I got old and grey. I just finalized a painful divorce and found myself with a mountain [$14,000] of debt. Not exactly what I pictured for myself at 25 years old,” she says. How she paid it off: She started by tackling her credit card debt, as it carried the highest interest rates. For motivation, she made a timeline of her progress and used the free debt payment tool http://www.readyforzero.com to come up with a payment plan she could handle. Then, there were sacrifices: Giving up cable, a gym membership, tanning/salon visits, vacations, dining out, and going to the movies. To up her income, she freelanced as a writer. 2. With a Master’s degree under her belt, Kari Gordon went into denial about her $30,300 loan balance. It took four years but she finally paid it off. Kari GordonWho she is: Kari , 30, lives in the greater New York City area and works at a non-profit. Her debt wake-up call: “When I finished graduate school, I was in student debt denial. When the first bill arrived, I stuck it in my bill basket and pretended it wasnt there for a week … For several months after I got that first bill, I paid the $350 minimum payment. With each electronic debit from my checking account I hated myself and hated my decision to take out student loans. Being in debt made me miserable!” How she paid it off: Gordon will be the first to tell you there is no secret to paying down debt . She broke her debt down into more manageable amounts and made a strict budget. With time, she was promoted at work and took up extra work babysitting, filling out online surveys and freelance writing. She also got a roommate, started cooking meals at home and got rid of her car. 3. Grayson Bell, 29, financed $50,000 for his small business with three credit cards and hit rock bottom during the recession.
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Seeking SBI’s help to defer debt repayment: Orchid
Like this story, share it with millions of investors on M3 Seeking SBI’s help to defer debt repayment: Orchid K Raghavendra Rao, chairman and managing director, Orchid Chemicals says the company has approached State Bank of India to delay the repayment of its USD 300 million debt. Post your opinion here Like this story, share it with millions of investors on M3 Seeking SBI’s help to defer debt repayment: Orchid K Raghavendra Rao, chairman and managing director, Orchid Chemicals says the company has approached State Bank of India to delay the repayment of its USD 300 million debt. In an interview to CNBC-TV18, Rao adds that most of the money received from Hospiras acquisition of Orchid’s active pharmaceutical ingredient (API) manufacturing facilities will be used for repaying a part of the debt. The company has approached the lead of the banks consortium for the restructuring of the loan.”We are asking for a postponement of the payment of the debt to the bank by talking to the consortium of bank. So, we would be looking to postpone some of the repayments and the dues that would be coming up in the next few quarters,” adds Rao. Below is an edited transcript of Raos interview to CNBC-TV18. Q: Walk us through what exactly this debt recast plan is and how much of your debt goes into some kind of restructuring? A: We are doing the deal with Hospira for one of our assets being sold for about USD 200 million. Most part of that will go for repayment of debt. But after that also we are left with around USD 300 million of debt. So, we are looking for rescheduling a part of that debt, which is due for repayment in the near future, so that the company can run better post deal. Q: What kind of terms of reschedulement are you looking for and have you reached out to your banks already, I know that you have got an no objection certificate (NOC) with regards to that asset sale that you were talking about but on this have you received any word from them? A: It is too early to say what kind of a reschedulement we are talking about. We have gone to State Bank of India (SBI) to help us in restructuring of balance debt. Most part of this USD 200 million from the deal, for which NOC has been given by the bank, will be going for repayment of debt. So, it is a combination of deal money going for debt repayment and balance debt being recashed. Q: By restructuring do you mean an extension though because you are already suffering from extremely high interest cost? A: By restructuring, I mean postponement of the payment of the debt to the bank by talking to the consortium of bank. So, we would be looking to postpone some of the repayments and the dues that would be coming up in the next few quarters. Q: Who are your key bankers at this point in order of who has the highest exposure with you versus who has the least? A: SBI has the highest exposure and they are leading this restructuring programme.
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Debt Relief Firms Are Charging for Free Programs
Thats the finding of an inquiry by the National Consumer Law Center , which advocates on behalf of borrowers. The center had secret shoppers call 10 student debt relief companies in March to seek information. Researchers also reviewed the Web sites of 10 more companies, examined actual contracts and studied online complaints. (The report didnt name the companies.) The student debt-relief industry has sprung up in part, the center says, because federal student-loan assistance programs often involve red tape that frustrates borrowers who could benefit from them. Government programs are unnecessarily complex, and borrowers too often confront an impenetrable bureaucracy that prevents them from accessing their rights, the report found. The government offers various programs to help student borrowers with federal loans, including repayment plans pegged to the borrowers income as well as the option to consolidate multiple loans into a single, often lower payment. An article in The New York Times found that student borrowers were vulnerable to debt collectors in part because the various assistance programs available to them were too complex. Debt-relief companies are stepping in to that vacuum, but they often promote the options as unique services they offer, when in fact they are government programs. It is deceptive, the centers report concludes, that most companies fail to disclose that their programs are actually federal government programs that an individual can access on her own, at no cost. The companies charge initial fees as high as $1,600 and monthly fees from $20 to $50, even though it is unclear what services, if any, the consumer is buying on a monthly basis. While they promote a range of services, most of the companies offer only loan consolidation, which not all borrowers may be eligible for. A review of many of the sites found that they required borrowers to fill out the same information required by the federal governments Direct Loan consolidation form, which is available online and can be submitted at no charge. Most of the companies require payment up front, a practice that appears to violate federal and state laws that mandate that debt relief companies must complete their services before charging customers. In addition, some of the company representatives the centers researchers spoke with said borrowers had to reveal their federal student loan PIN in order to move ahead with service. That raises serious privacy concerns, the center says, and violates Education Department recommendations about disclosure of student PINs. Given the difficulty of navigating the federal student loan assistance programs, the center found, some borrowers may think it is worthwhile to hire someone to help them. But the center made several recommendations so to avoid abuses by the companies advertising such services. (Several steps could be achieved by enforcement of existing state and federal consumer laws, the center noted.) The federal government should simplify its own assistance programs so they are easier for borrowers to use. Fees charged by private debt relief companies should be clearly disclosed. Firms should be prohibited from requiring student PINS, which grant access to the National Student Loan Data System. Have you used a private debt-relief company to help with your student loans? What was the outcome? A version of this article appeared in print on 06/29/2013, on page B4 of the NewYork edition with the headline: Free Assistance At Steep Prices.
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With Student Loan Debt Surpassing $1 Trillion, Brown Outlines Bill to Help Americans with Costly Private Student Loan Debt
“Why should our students and graduates be the last to benefit from historically low interest rates? Helping graduates refinance their private student loan debt into more affordable terms frees up funds for them to buy houses, start businesses, or contribute to their communities. It makes sense for our students and graduates and it makes sense for our economy,” Brown said. “Too many Ohioans are still paying for college decades after they graduate – through private loans with high interest rates. My bill would allow borrowers to refinance their costly private loans into more affordable loans. These borrowers could see their interest rates cut in half, lowering their payments at no cost to taxpayers.” Last year, outstanding student loan debt reached more than 1 trillion and 81 percent of the undergraduates with high student debt had private loans. This excessive student loan debt dampens home purchases, slows small business startups, diverts retirement savings, and limits opportunities for economic expansion in rural communities. Private loans typically have higher interest rates – that can top 18 percent – and are more difficult to refinance and offer fewer payment options than loans administered by the U.S. Department of Education. Many students turn to private loans because federal loan limits do not meet their need. The current federal loan limit for undergraduate students is 31,000. “The burden of the ‘debt for diploma’ system makes it harder for students to get ahead as they struggle to repay their loans. Student debt also negatively impacts the overall economy, as those with high levels of debt often must delay home purchases, pay higher mortgage rates and put off retirement savings; actions which ultimately lead, through a ripple effect, to a considerable wealth loss over a lifetime,” says Robert Hiltonsmith, Demos Policy Analyst and author of a series of upcoming Demos reports quantifying the cumulative wealth effects of private and public student loans.”Private student lending is particularly problematic because these high-interest, adjustable, market-determined loans are more likely to be borrowed by economically disadvantaged students and those attending for-profit institutions. And at an average interest rate of 10%, more than double the federal rate, many of these students need relief to avoid having these loans torpedo their financial futures.” Specifically, the Refinancing Education Funding to Invest (REFI) for the Future Act would: * Authorize the Department of the Treasury to find creative solutions that will eliminate inefficiencies in the private student loan market and accommodate reasonable refinancing opportunities for private student loan borrowers. * Encourage greater competition, innovation, and participation of private capital in a currently stagnant private student loan refinancing market, including: * Require regular reporting and oversight. * Expire no later than five years after enactment. * Create opportunities for private student loan borrowers to take advantage of the current low interest rates will ensure that borrowers pay rates that reflect their credit risk so that they may pursue economically productive activities like buying a home or starting a small business. Brown is also turning up the pressure on his colleagues to block interest rates from doubling for more than 360,000 Ohio students who rely on subsidized Stafford loans. Unless Congress acts by July 1, 2013, interest rates will jump to 6.8 percent. Brown is inviting Ohio college students, graduates, and their families to tell him their student loan stories by visiting his website brown.senate.gov/CollegeLoanStories so Brown can share stories from Ohioans on the Senate floor.
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