If you are beginning to think about starting a career again you need to speculate your finance alternatives in uniformity to earnings your way through college, it is important for you to know certain aspects of student loan funding. Touching you will pride some rebut explanations on certain capital concepts along with facts that you requisite recognize if you are planning to profit by for a student loan and you obtain not decided yet what is that you need.
Federal Student Funding
The first alternative you weakness to consider is to request a public student loan. Federal student loans are awarded according to the needs of the applicants and thus, this guarantees inspection even if you own bad surmise or no credit at organic or if you do not have a suitable advance because affording a personal student loan. Those who are particularly in ought or underprivileged own more chances of obtaining amiable. Other people restraint also obtain financing through these loans but the driver's seat commit unparalleled provide part of the college costs. These loans are subsidized which consideration that the thing rate hysterical is significantly low due to the bridle does not avail from these programs.
Regular Student Loans
Individualistic student loans tend to charge a higher hobby degree but provide supplementary loan amounts. There are however subsidized student loans that feature junior rates even though they are private loans. Skillful are few exclusive student loan lenders that offer loans payable after graduation. Thus, if you need that indulgent of loans, you hold to resort to subordination financing. Those private student loans that are not subsidized have credit besides advancement requirements ethical like portion other personal loan which means that you probably need the aid of a co - signer unless you have a well established capital position.
Subsidized – Not Subsidized Student Loans
Whether a student loan is subsidized or not will determine not onliest the into ratio that you consign have to pay but also the requisite you will need to appropriate considering fling. Subsidized student loans make not own coarse credit or buildup requirements owing to they are mostly awarded according to the needs of the applicant while those student loans that are not subsidized crave you to meet some painless accept further income requirements. Of course, seeing these loans are for students, lenders are not so hard on the applicants as with innate unsecured loans. However, if you have had a bankruptcy in the bygone or totally many delinquencies on your credit history, you cede need to promote reserve a co - signer with a good credit gag.
Trustworthiness Loans Ergo Parents Can Second Their Children
PLUS loans are awarded to the parents of college students to help them with their studies. Being state funding requires the local to implement with a percentage of the college costs, federal student loans do not provide all the property needed for financing college studies. Since, PLUS loans bearings conceived to solve this difficulties besides let parents transfer the amount they are supposed to washed-up a Loan. These loans further have subsidized interest rates but the repayment program does not start after graduation. Instead, it consign start immediately after corroboration equivalent vastly contrastive loans do.
Friday, May 29, 2009
Some Considerations About Personal Loans
It is always essential to make the public aware of things that are not often said. Find out what those things are.
It is always necessary to make the public aware of things that are not often said, sometimes taken for granted, and even other times, hidden from them. What makes repay conditions to be considered usury and what gives you a lower APR? What things can enhance your eligibility or the deal you make with the lender.
The Natural Requirement
Most, not to say all lenders, want to make sure they get their money back and this is done through a security. In other words, they want to have a way of making cash fast on something that is yours. This is only natural and a lender who does not do that is an idiot, a philanthropist or probably a close relative of yours, which is not the case here.
What Gets You A Better Deal?
Well, the best possible scenario is when you are a homeowner and the property is not mortgaged. Even better still, is the fact that your property is insured. Personal loans are special, in the way of not needing to inform the use you will give to the money, once it is in your hands. Nevertheless, it is useful to inform what you will do with the loan, when it can mean a further security.
For example, adding a room to your house as the family gets bigger, can be taken as a sign of stability, being definitively settled in the area you live in and responsibility towards the welfare of your family group.
Other Assets
Other assets can be taken as securities, like your car, trailer or something valuable. These cases, of course will cost you a higher APR, or Annual Percentage Rate, but are still interesting in the way that it is not necessary for you to provide a co-debtor, that is someone who will respond to your debts in case you fail to do so.
So, What Makes A Lousy Deal?
First off, the wrong choice. I mean, the first lender that comes into your sight, or even a wise guy wanting to take advantage of your bad credit. Bad credit is just that: Bad credit. Do not feel overwhelmed by it and know that you deserve good treatment, whatever your credit. Another thing that makes the deal a lousy one is when your home is mortgaged and your car is still pinned as a security for your car loan.
Probably, if the debt is near the end, you may want to get a small unsecured loan to pay off the car loan and use the car as security for the personal loan. The same thing applies to the mortgage on your house. Of course, you must take into account the addition of payments due every month, so as not to incur in unnecessary financial harassment to your family.
One Last Point
Always find out what the normal bank interest rate is, for a deposit of approximately the same amount of the loan you are looking for. Then calculate a healthy profit for the lender, but consider that it should never exceed the APR charged by credit cards companies. Otherwise you will be on the chopping block in no time. If you are not given the APR directly, ask for a quote and then calculate the interest rate yourself, with a few numbers on paper, or a simple calculator.
Research, investigate, find out, without even leaving your home. Surely you will find a good option on the Internet. There is always a right one for you, if you take the time.
It is always necessary to make the public aware of things that are not often said, sometimes taken for granted, and even other times, hidden from them. What makes repay conditions to be considered usury and what gives you a lower APR? What things can enhance your eligibility or the deal you make with the lender.
The Natural Requirement
Most, not to say all lenders, want to make sure they get their money back and this is done through a security. In other words, they want to have a way of making cash fast on something that is yours. This is only natural and a lender who does not do that is an idiot, a philanthropist or probably a close relative of yours, which is not the case here.
What Gets You A Better Deal?
Well, the best possible scenario is when you are a homeowner and the property is not mortgaged. Even better still, is the fact that your property is insured. Personal loans are special, in the way of not needing to inform the use you will give to the money, once it is in your hands. Nevertheless, it is useful to inform what you will do with the loan, when it can mean a further security.
For example, adding a room to your house as the family gets bigger, can be taken as a sign of stability, being definitively settled in the area you live in and responsibility towards the welfare of your family group.
Other Assets
Other assets can be taken as securities, like your car, trailer or something valuable. These cases, of course will cost you a higher APR, or Annual Percentage Rate, but are still interesting in the way that it is not necessary for you to provide a co-debtor, that is someone who will respond to your debts in case you fail to do so.
So, What Makes A Lousy Deal?
First off, the wrong choice. I mean, the first lender that comes into your sight, or even a wise guy wanting to take advantage of your bad credit. Bad credit is just that: Bad credit. Do not feel overwhelmed by it and know that you deserve good treatment, whatever your credit. Another thing that makes the deal a lousy one is when your home is mortgaged and your car is still pinned as a security for your car loan.
Probably, if the debt is near the end, you may want to get a small unsecured loan to pay off the car loan and use the car as security for the personal loan. The same thing applies to the mortgage on your house. Of course, you must take into account the addition of payments due every month, so as not to incur in unnecessary financial harassment to your family.
One Last Point
Always find out what the normal bank interest rate is, for a deposit of approximately the same amount of the loan you are looking for. Then calculate a healthy profit for the lender, but consider that it should never exceed the APR charged by credit cards companies. Otherwise you will be on the chopping block in no time. If you are not given the APR directly, ask for a quote and then calculate the interest rate yourself, with a few numbers on paper, or a simple calculator.
Research, investigate, find out, without even leaving your home. Surely you will find a good option on the Internet. There is always a right one for you, if you take the time.
Looking at Student Loan Debt Consolidations
Many students have had to take out loans to help pay for school, and almost just as many are having a difficult time paying off those loans now that they are out of school. For some of them, even their parents are working to pay off some of these loans. Many of the people in this situation are often wondering if what their options are for paying these off faster and easier.
Student loan consolidation is often the answer to the problems. With student loan consolidations, the numerous and hard to pay bills are turned into one low, monthly payment to help make living easier. Thanks to these low payments, it is often easier for people to pay for their other living expenses, like groceries, and even the occasional movie ticket.
When undergoing a student loan consolidations there are several different things that people must consider. The first and maybe biggest thing is grouping. Many students have both federal student loans and private student loans. It is very important to keep these two types of student loans separated when undergoing student loan consolidation because the federal student loans offer a few important things that you can no longer get if they are consolidated with private student loans.
One of these wonderful things is tax breaks on the interest rates. As you all know, tax breaks can be really nice to have. If you try to combine federal student loans with private student loans though, you will lose this because it is impossible on the private loans.
Another thing that you can look forward to with federal student loans, that is impossible when your student loan consolidation combines both federal and private student loans, is the possible pardons on specific loans that you can get.
The next important thing to look at is the interest rate. If your loans that are going to be combined all have the same interest rate, then it will be a little higher, but there will be no extra fees. If the student loan consolidation combinations that you are going to be using have different interest rates, then your rate will be somewhere between both the highest and the lowest rate that you currently have. Again, for the most part, except with special loans, you will not be charged any fees. Even with those that you are charged a fee for, it will be small and it will never be an upfront fee.
When you are looking at the interest rates offered, you may be told that your interest rate is lower than the rates you currently pay. This will pretty much never be true. Your rate will always land somewhere between what your highest and lowest rates are.
If you find a student loan consolidation program that requires an upfront fee, then there is a very good chance that you have stumbled onto a scam. Scams are something that you defiantly want to watch out for when you are looking for a student loan debt consolidation program.
Student loan consolidation is often the answer to the problems. With student loan consolidations, the numerous and hard to pay bills are turned into one low, monthly payment to help make living easier. Thanks to these low payments, it is often easier for people to pay for their other living expenses, like groceries, and even the occasional movie ticket.
When undergoing a student loan consolidations there are several different things that people must consider. The first and maybe biggest thing is grouping. Many students have both federal student loans and private student loans. It is very important to keep these two types of student loans separated when undergoing student loan consolidation because the federal student loans offer a few important things that you can no longer get if they are consolidated with private student loans.
One of these wonderful things is tax breaks on the interest rates. As you all know, tax breaks can be really nice to have. If you try to combine federal student loans with private student loans though, you will lose this because it is impossible on the private loans.
Another thing that you can look forward to with federal student loans, that is impossible when your student loan consolidation combines both federal and private student loans, is the possible pardons on specific loans that you can get.
The next important thing to look at is the interest rate. If your loans that are going to be combined all have the same interest rate, then it will be a little higher, but there will be no extra fees. If the student loan consolidation combinations that you are going to be using have different interest rates, then your rate will be somewhere between both the highest and the lowest rate that you currently have. Again, for the most part, except with special loans, you will not be charged any fees. Even with those that you are charged a fee for, it will be small and it will never be an upfront fee.
When you are looking at the interest rates offered, you may be told that your interest rate is lower than the rates you currently pay. This will pretty much never be true. Your rate will always land somewhere between what your highest and lowest rates are.
If you find a student loan consolidation program that requires an upfront fee, then there is a very good chance that you have stumbled onto a scam. Scams are something that you defiantly want to watch out for when you are looking for a student loan debt consolidation program.
Subsidized and Unsubsidized Stafford Student Loans
Stafford loans were established by Congress in 1965 as part of the FFELP (Federal Family Education Loan Program) to provide financial aid for students. They were originally intended to help student who were 'in need' but just what was meant by the term 'in need' was not entirely clear and the program was rapidly expanded. Today, Stafford loans account for more than 90% of the $50 billion dollars plus which is distributed each year to the various FFELP programs.
One way in which the definition of 'in need' was quickly broadened was to create two different forms of Stafford loan - subsidized and unsubsidized.
In the case of subsidized loans, the Federal Government pays the interest charges which would ordinarily accrue from the date on which the loan is originated until payments start. Usually, no payments are made while the student is attending school (as long as the program is a half-time program or greater) and for a further six month grace period after completion of the course. Students can however request that payments begin earlier if they wish to start repaying their loan before the usual date.
Because the government pays interest on these loans they are normally need-based in that aid officials will look at a student's family income when deciding whether or not to grant a loan. In making their decision a number known as the EFC (Expected Family Contribution) is used and this is obtained from income information provided on the FAFSA (Free Application for Federal Student Aid) application form.
About two out of every three subsidized Stafford loans are given to students whose parents have an adjusted gross income of less than $50,000 per year. A further 25% are awarded to students whose families fall into the $50,000 to $100,000 per year range. However, the definition of 'in need' is still very flexible and about 10% of subsidized loans are given to students whose combined family income is in excess of $100,000.
If a student does not qualify for a subsidized loan then he or she will normally be eligible for an unsubsidized Stafford loan. In this case interest due on the loan accumulates from the day the loan money is disbursed until the day that the loan is paid off and interest charges can build rapidly. For example, even in we take the case of a modest $5,000 loan, at 6.8% the first year's interest charge is approximately $430 and this is added to the $5,000 with further interest charges being applied to the higher figure in subsequent years.
Trying to work out interest payments can be a complicated business, especially if you have a series of different loans taken out over two or three years in college, because, while interest is quoted as an annual figure, it is calculated monthly and added to the loan principle as you go along with interest in subsequent months being charged on the increasing figure. A good approximation can be made however by using one of the many freely available online mortgage calculators.
From the example above it should also be noted that $5,000 is a very low figure as student loans go and that most students will borrow considerably more than this. Indeed, the average student probably borrows about $15,000 in a mixture of different government and private loans
One way in which the definition of 'in need' was quickly broadened was to create two different forms of Stafford loan - subsidized and unsubsidized.
In the case of subsidized loans, the Federal Government pays the interest charges which would ordinarily accrue from the date on which the loan is originated until payments start. Usually, no payments are made while the student is attending school (as long as the program is a half-time program or greater) and for a further six month grace period after completion of the course. Students can however request that payments begin earlier if they wish to start repaying their loan before the usual date.
Because the government pays interest on these loans they are normally need-based in that aid officials will look at a student's family income when deciding whether or not to grant a loan. In making their decision a number known as the EFC (Expected Family Contribution) is used and this is obtained from income information provided on the FAFSA (Free Application for Federal Student Aid) application form.
About two out of every three subsidized Stafford loans are given to students whose parents have an adjusted gross income of less than $50,000 per year. A further 25% are awarded to students whose families fall into the $50,000 to $100,000 per year range. However, the definition of 'in need' is still very flexible and about 10% of subsidized loans are given to students whose combined family income is in excess of $100,000.
If a student does not qualify for a subsidized loan then he or she will normally be eligible for an unsubsidized Stafford loan. In this case interest due on the loan accumulates from the day the loan money is disbursed until the day that the loan is paid off and interest charges can build rapidly. For example, even in we take the case of a modest $5,000 loan, at 6.8% the first year's interest charge is approximately $430 and this is added to the $5,000 with further interest charges being applied to the higher figure in subsequent years.
Trying to work out interest payments can be a complicated business, especially if you have a series of different loans taken out over two or three years in college, because, while interest is quoted as an annual figure, it is calculated monthly and added to the loan principle as you go along with interest in subsequent months being charged on the increasing figure. A good approximation can be made however by using one of the many freely available online mortgage calculators.
From the example above it should also be noted that $5,000 is a very low figure as student loans go and that most students will borrow considerably more than this. Indeed, the average student probably borrows about $15,000 in a mixture of different government and private loans
How to Refinance Student Loans: 5 Tips
Once you have been in college for one or two years, you may start getting offers to refinance student loans. The offers will all sound tempting, but you should definitely get your facts straight before going through with anything. There are many things you will need to discover and compare.
Refinancing is generally a good idea at any stage of your education. You can save a lot of money on interest and finance charges by consolidating into one loan. However, you want to be careful that you do not actually make things more difficult for yourself in the long run.
1. You need to keep track of the interest rates being offered. Know what the interest rates on your current loans are, and what interest rates may be offered in the future. You should also be aware of the current average interest rate so you can be sure the rate you are being offered is fair. Additionally, find out if the interest rate being offered in the refinance is a fixed or adjustable rate.
2. Find out what the payment terms will be. If you are still enrolled in college, you should be able to continue holding off payments on the principal until you have graduated. This is called an economic deferment. Interest will likely accrue during the deferment, and you should be able to pay that monthly without penalty.
3. Ask the company or lending institution when payments will be expected to start. In most cases, you should be given at least six months from the date of your graduation before you have to start paying on your student loans. However, when you refinance student loans the rules can change. Good companies will still give you the six months grace period.
4. It can be beneficial to you to refinance your loans every year or two, keeping them consolidated and with one company. Additionally, you will definitely want to refinance when your education is complete to make the loans more manageable. Make sure that the terms of the refinance do not exclude this option.
5. Try to choose a company that can work with you over time to continue refinancing until your education is complete. When that time comes, you may need to make additional arrangements as you seek out employment in your new career. The company should also be willing to accept early payment of the loans without penalty, in case you find yourself able to pay ahead, or even pay off the loan early.
Refinancing is generally a good idea at any stage of your education. You can save a lot of money on interest and finance charges by consolidating into one loan. However, you want to be careful that you do not actually make things more difficult for yourself in the long run.
1. You need to keep track of the interest rates being offered. Know what the interest rates on your current loans are, and what interest rates may be offered in the future. You should also be aware of the current average interest rate so you can be sure the rate you are being offered is fair. Additionally, find out if the interest rate being offered in the refinance is a fixed or adjustable rate.
2. Find out what the payment terms will be. If you are still enrolled in college, you should be able to continue holding off payments on the principal until you have graduated. This is called an economic deferment. Interest will likely accrue during the deferment, and you should be able to pay that monthly without penalty.
3. Ask the company or lending institution when payments will be expected to start. In most cases, you should be given at least six months from the date of your graduation before you have to start paying on your student loans. However, when you refinance student loans the rules can change. Good companies will still give you the six months grace period.
4. It can be beneficial to you to refinance your loans every year or two, keeping them consolidated and with one company. Additionally, you will definitely want to refinance when your education is complete to make the loans more manageable. Make sure that the terms of the refinance do not exclude this option.
5. Try to choose a company that can work with you over time to continue refinancing until your education is complete. When that time comes, you may need to make additional arrangements as you seek out employment in your new career. The company should also be willing to accept early payment of the loans without penalty, in case you find yourself able to pay ahead, or even pay off the loan early.
Little Known Student Loan Interest Rate Facts
How much do you know about your student loan interest rate? Chances are you don’t know as much as you should. Often we get so caught up in our studies that we don’t really think about the details of our academic debt. We simply sign the forms and go to class. Unfortunately, you get hit with the reality of your loans when you graduate and must start repaying them.
Deferred Student Loans
It's surprising how many people do not realize that the student loan interest rate is not halted while the loan is on deferment. Just because you are not paying on the loan doesn’t mean that interest isn’t racking up. You can avoid ugly surprises in the future by being aware of your interest rate and paying the interest throughout your academic career.
You should definitely pay your interest monthly if you are finished with your degree but have received an economic deferment. The economic deferment is given when you truly do not have the ability to pay your loans after leaving school. Once you have qualified, however, your loans continue to accrue interest, and you are much better off paying that interest as you go if at all possible.
Variable versus Fixed Interest Rates
Do you know if your student loan interest rate is fixed or adjustable? This is an important factor of your loan agreement. Adjustable rates have a bad reputation, but can actually be better for you financially than a fixed rate. If you have an adjustable rate, be sure that it adjusts up or down, based on the average interest rates set by the government and financial institutions. If it only goes up, you’re better off with a fixed rate.
If, however, your student loan interest rate is fixed and interest rates drop, you could find yourself paying a lot more interest than is otherwise necessary. If you have inadvertently fallen into this common trap, you should consider refinancing your loans at a lower interest rate. At that time you should opt for the adjustable rate, with the provision that it adjusts accordingly as mentioned above.
Finance Charges versus Interest Rates
Finance charges are not the same as interest. Your loan agreement may contain provisions for the lending institution to charge a finance charge monthly or annually based on the amount owed. This is charged in addition to, not instead of, interest.
If you are being charged finance charges on more than one loan, the student loan interest rate may not make much of a difference in the amount of academic debt you are accumulating. You should consider consolidating your loans so that only one finance charge is applied. This will save you a lot of money in the long run.
Deferred Student Loans
It's surprising how many people do not realize that the student loan interest rate is not halted while the loan is on deferment. Just because you are not paying on the loan doesn’t mean that interest isn’t racking up. You can avoid ugly surprises in the future by being aware of your interest rate and paying the interest throughout your academic career.
You should definitely pay your interest monthly if you are finished with your degree but have received an economic deferment. The economic deferment is given when you truly do not have the ability to pay your loans after leaving school. Once you have qualified, however, your loans continue to accrue interest, and you are much better off paying that interest as you go if at all possible.
Variable versus Fixed Interest Rates
Do you know if your student loan interest rate is fixed or adjustable? This is an important factor of your loan agreement. Adjustable rates have a bad reputation, but can actually be better for you financially than a fixed rate. If you have an adjustable rate, be sure that it adjusts up or down, based on the average interest rates set by the government and financial institutions. If it only goes up, you’re better off with a fixed rate.
If, however, your student loan interest rate is fixed and interest rates drop, you could find yourself paying a lot more interest than is otherwise necessary. If you have inadvertently fallen into this common trap, you should consider refinancing your loans at a lower interest rate. At that time you should opt for the adjustable rate, with the provision that it adjusts accordingly as mentioned above.
Finance Charges versus Interest Rates
Finance charges are not the same as interest. Your loan agreement may contain provisions for the lending institution to charge a finance charge monthly or annually based on the amount owed. This is charged in addition to, not instead of, interest.
If you are being charged finance charges on more than one loan, the student loan interest rate may not make much of a difference in the amount of academic debt you are accumulating. You should consider consolidating your loans so that only one finance charge is applied. This will save you a lot of money in the long run.
How To Repay Back Your Student Loans
Many college students and graduates are looking for a options for repaying their student loans. While borrowers may be having difficulty paying back loans, there is help available.
What causes difficulty in paying back student loans?
New college graduates may find that it takes them longer to find a job than they expected. While there's a six month grace period from the time students graduate until repayment begins, sometimes it takes six months or longer to find a job.
Many recent graduates who are employed are underemployed -- working part-time or temporary jobs until they find a permanent position. During this time they may need help in making loan payments.
New college graduates can use several strategies to help with student loan repayment. Taking on additional part-time jobs or freelancing may be an option.
It is also wise to keep living expenses low the first few years out of college. Graduates can live with a roommate, or downsize into a smaller apartment. If new graduates are still looking for a job, it may be a good idea not to move until permanent employment is found. Then it will be easier to move to an area closer to the job.
Applying for a forbearance may help during times of difficulty making loan payments. A forbearance is temporary period of suspension of payments on a federal or direct loan after repayment has begun, and if the student does not qualify for deferment.
This means that if a student has already started paying back loans, they can apply for a suspension of payments on the grounds of financial hardship. A forbearance must be applied for through the lender. Being able to hold off payments for a few months can be a big help during a time of financial hardship.
Another student loan debt strategy is to consolidate payments. Unless consolidated, each student loan is accounted for and paid separately. When a student graduates they will receive paperwork and payment slips for each loan. 2, 5, 12... no matter how many loans were taken out, they will be billed separately. Adding up all of these individual loan payments could total $300-$1000 per month or more! Not many students can afford such payments.
That's where consolidation comes in. Consolidation is a process that combines all of the student loans into one loan. Borrowers can dramatically reduce monthly payments of student loans by consolidating. Average monthly payments could be less than $100 to around $250 per month. This is just an estimate. The monthly payment depends on the total amount borrowed, the interest rate and the way that loans are consolidated.
Consolidating through The Income Contingent Repayment plan is designed to help make repaying student loans easier for students who intend to pursue jobs with lower salaries, such as careers in public service. The monthly payment amount is adjusted annually, based on changes in family size and annual income. This program is only available through the US Department of Education, not a lender or bank.
Finally, the Graduated Repayment Plan starts the payments at a low level (usually interest only) and gradually increases the payments until the balance is paid. This is helpful for graduates because payments are low when the first graduate, and increase as earning power increases over the years. This plan is available by consolidating through a bank or other lender.
It is important to note that according to current regulations student loans may only be consolidated once. So borrowers who have already graduated and consolidated with a standard plan cannot take advantage of the income contingent or graduated plans. For borrowers who have already consolidated, a forbearance may be the best option for temporary relief of student loan debt.
Use the student loan repayment calculator from finaid.org to find out what loan payments could be using different types of consolidation.
College graduates can find student debt relief using one of the strategies mentioned above. Discuss loan repayment options with your lender and see what can be done to help repay education loans.
What causes difficulty in paying back student loans?
New college graduates may find that it takes them longer to find a job than they expected. While there's a six month grace period from the time students graduate until repayment begins, sometimes it takes six months or longer to find a job.
Many recent graduates who are employed are underemployed -- working part-time or temporary jobs until they find a permanent position. During this time they may need help in making loan payments.
New college graduates can use several strategies to help with student loan repayment. Taking on additional part-time jobs or freelancing may be an option.
It is also wise to keep living expenses low the first few years out of college. Graduates can live with a roommate, or downsize into a smaller apartment. If new graduates are still looking for a job, it may be a good idea not to move until permanent employment is found. Then it will be easier to move to an area closer to the job.
Applying for a forbearance may help during times of difficulty making loan payments. A forbearance is temporary period of suspension of payments on a federal or direct loan after repayment has begun, and if the student does not qualify for deferment.
This means that if a student has already started paying back loans, they can apply for a suspension of payments on the grounds of financial hardship. A forbearance must be applied for through the lender. Being able to hold off payments for a few months can be a big help during a time of financial hardship.
Another student loan debt strategy is to consolidate payments. Unless consolidated, each student loan is accounted for and paid separately. When a student graduates they will receive paperwork and payment slips for each loan. 2, 5, 12... no matter how many loans were taken out, they will be billed separately. Adding up all of these individual loan payments could total $300-$1000 per month or more! Not many students can afford such payments.
That's where consolidation comes in. Consolidation is a process that combines all of the student loans into one loan. Borrowers can dramatically reduce monthly payments of student loans by consolidating. Average monthly payments could be less than $100 to around $250 per month. This is just an estimate. The monthly payment depends on the total amount borrowed, the interest rate and the way that loans are consolidated.
Consolidating through The Income Contingent Repayment plan is designed to help make repaying student loans easier for students who intend to pursue jobs with lower salaries, such as careers in public service. The monthly payment amount is adjusted annually, based on changes in family size and annual income. This program is only available through the US Department of Education, not a lender or bank.
Finally, the Graduated Repayment Plan starts the payments at a low level (usually interest only) and gradually increases the payments until the balance is paid. This is helpful for graduates because payments are low when the first graduate, and increase as earning power increases over the years. This plan is available by consolidating through a bank or other lender.
It is important to note that according to current regulations student loans may only be consolidated once. So borrowers who have already graduated and consolidated with a standard plan cannot take advantage of the income contingent or graduated plans. For borrowers who have already consolidated, a forbearance may be the best option for temporary relief of student loan debt.
Use the student loan repayment calculator from finaid.org to find out what loan payments could be using different types of consolidation.
College graduates can find student debt relief using one of the strategies mentioned above. Discuss loan repayment options with your lender and see what can be done to help repay education loans.
You Should Get A Student Loans If You Really Need It
Student loans are both a blessing and a curse to college students all across the country. On one hand, student loans allow you to have the money you need in many cases to attend college at all. On the other hand, most college students, particularly those entering college for the first time have inflated opinions of their starting salaries upon graduation and the bills they will face while living in the real world. In fact, most freshmen college students have no real concept of the limits of money in which to base their decisions as to whether or not they can realistically expect to repay those funds once they've graduated college.
The sad truth is that many college graduates find that for the first 10-15 years after they have graduated college, they are essentially indentured servants to their student loan debts. There are many reasons for this and different college graduates will find different things about their student loans when the appropriate time comes. First of all, those taking out student loans need to understand that a college degree does not guarantee a high starting salary. Beyond that, a college degree is no guarantee that there will be employers lining up to take your name and number upon graduation. The truth is that most college grads take anywhere from 6 months to a year to find a job in their fields and even then the starting salaries are often far less than anticipated.
Part of the blame for over-inflated expectations is the fault of universities attempting to validate their high tuition rates by displaying average starting salaries of only those that have successful offers in the field of study immediately upon graduation (which usually indicates a history of working with the company or another company as an intern prior to being hired) and not those students who have no prior work experience in their chosen fields. Part of the expectations is students reading job advertisements for experienced workers in a field and assuming that an education will provide the experience that employers require. Regardless of the reason, most starting salary expectations are not realistic in light of the current market.
The problem is that for many students a student loan is the difference in receiving a college education or not receiving one. For these students, there is no option. The price they will pay (with interest) for having student loans in order to get through the educational process will repay itself over the course of a lifetime if they are wise about making the necessary payments and stay on top of things such as consolidation loans and making payments on time.
Student loans are a great tool for those who have no other options when it comes to attending and affording to attend a university. On the other hand, for those who do not have an absolute need for the funds a student loan can provide they can prove to be problematic when trying to establish your career and your lifestyle upon graduation. This is a tool for education that should be used sparingly at best.
Whether or not you choose to take out student loans in order to fund your college education it is a good idea if you exhaust all other available resources first. Check out your options for grants, scholarships, and work-study programs before leaping into student loans to pay for your education.
The sad truth is that many college graduates find that for the first 10-15 years after they have graduated college, they are essentially indentured servants to their student loan debts. There are many reasons for this and different college graduates will find different things about their student loans when the appropriate time comes. First of all, those taking out student loans need to understand that a college degree does not guarantee a high starting salary. Beyond that, a college degree is no guarantee that there will be employers lining up to take your name and number upon graduation. The truth is that most college grads take anywhere from 6 months to a year to find a job in their fields and even then the starting salaries are often far less than anticipated.
Part of the blame for over-inflated expectations is the fault of universities attempting to validate their high tuition rates by displaying average starting salaries of only those that have successful offers in the field of study immediately upon graduation (which usually indicates a history of working with the company or another company as an intern prior to being hired) and not those students who have no prior work experience in their chosen fields. Part of the expectations is students reading job advertisements for experienced workers in a field and assuming that an education will provide the experience that employers require. Regardless of the reason, most starting salary expectations are not realistic in light of the current market.
The problem is that for many students a student loan is the difference in receiving a college education or not receiving one. For these students, there is no option. The price they will pay (with interest) for having student loans in order to get through the educational process will repay itself over the course of a lifetime if they are wise about making the necessary payments and stay on top of things such as consolidation loans and making payments on time.
Student loans are a great tool for those who have no other options when it comes to attending and affording to attend a university. On the other hand, for those who do not have an absolute need for the funds a student loan can provide they can prove to be problematic when trying to establish your career and your lifestyle upon graduation. This is a tool for education that should be used sparingly at best.
Whether or not you choose to take out student loans in order to fund your college education it is a good idea if you exhaust all other available resources first. Check out your options for grants, scholarships, and work-study programs before leaping into student loans to pay for your education.
The Truth About Student Loans
When it comes to getting a college education most people can agree that the costs can be staggering at best. Even the least expensive colleges in the nation can add up over a four or five year period of time creating crippling debt for those who do not qualify for some of the better grant programs of substantial scholarships.
The problem lies in the fact that the parents of most traditional college students make too much money to qualify for the free financial aid that is needs based and very few qualify for the limited number of scholarships that are available to students based on merit. Even among those that qualify competition and fierce and there are no guarantees. Enter the student loan. There are all kinds of student loans and unfortunately with rising costs associated with college attendance and the growing necessity of a college degree for success in this country it is becoming more and more difficult to pay the price that is associated with higher education.
There are three types of loans that are commonly found for college students. They include federal student loans, federal plus loans, and private student loans. Each type of loan has advantages and disadvantages that are unique to that particular loan. Below I will give a little information about each of the loan types and whom they may benefit.
Student loans. There are three different types of student loans: subsidized, unsubsidized, and Perkins loans.
Perkins loans are only available to students who display exceptional financial need. These loans are available at a 5% interest rate and are available to both graduate and undergraduate students. Perkins loans are extended through the university you attend and will be repaid to the university unlike the other types of student loans, which are repaid to the lending agency.
Subsidized student loans are loans in which the interest is deferred until graduation or you cease to be a qualifying student. What this means is that while you are responsible for repaying the loan upon graduation the interest on these loans does not begin to accrue until your begin repayment 6 months after graduation or your cease to be at least a half time student of the university. You must qualify based on your income in order to receive a subsidized student loan. While the needs requirements for these loans isn't as grave as those required in order to receive a Perkins loan you must still qualify.
Unsubsidized student loans do not require qualification on a needs basis. You must be a student and enrolled at least half time in order to receive an unsubsidized student loan. The good news however for those who do not qualify based on needs for other student loan options is that this type of loan is available to all qualifying students regardless of need. The interest on these loans however begins to accrue immediately, which means they can really add up over time.
PLUS loans are loans that are taken out by the parents of students who need the funds in order to cover educational expenses. The maximum amount that can be borrowed is the cost of attendance minus any financial aid awards the student has already received. The repayment on these loans begins 60 days after the loan is dispersed and the repayment period can be up to 10 years.
In order to cover the costs involved in education that go above and beyond what the government recognizes as acceptable college related expenses you can opt to go the route of private student loans rather then relying solely upon federal financial aid for your student loan source. These loans require that you qualify in order to receive them based on your credit rather than your need and must be used for educational purposes only. With these particular loans you really need to make sure you read all the fine print as different companies offer different conditions and different perks. You should really take the time and compare prices and options before taking out a private student loan and this should be done only as a last resort.
Student loans for many can be the difference in attending college and getting the education you are hoping for and not being able to pay the high costs that go along with higher education. For this reason you should treat them with respect and not take them lightly.
The problem lies in the fact that the parents of most traditional college students make too much money to qualify for the free financial aid that is needs based and very few qualify for the limited number of scholarships that are available to students based on merit. Even among those that qualify competition and fierce and there are no guarantees. Enter the student loan. There are all kinds of student loans and unfortunately with rising costs associated with college attendance and the growing necessity of a college degree for success in this country it is becoming more and more difficult to pay the price that is associated with higher education.
There are three types of loans that are commonly found for college students. They include federal student loans, federal plus loans, and private student loans. Each type of loan has advantages and disadvantages that are unique to that particular loan. Below I will give a little information about each of the loan types and whom they may benefit.
Student loans. There are three different types of student loans: subsidized, unsubsidized, and Perkins loans.
Perkins loans are only available to students who display exceptional financial need. These loans are available at a 5% interest rate and are available to both graduate and undergraduate students. Perkins loans are extended through the university you attend and will be repaid to the university unlike the other types of student loans, which are repaid to the lending agency.
Subsidized student loans are loans in which the interest is deferred until graduation or you cease to be a qualifying student. What this means is that while you are responsible for repaying the loan upon graduation the interest on these loans does not begin to accrue until your begin repayment 6 months after graduation or your cease to be at least a half time student of the university. You must qualify based on your income in order to receive a subsidized student loan. While the needs requirements for these loans isn't as grave as those required in order to receive a Perkins loan you must still qualify.
Unsubsidized student loans do not require qualification on a needs basis. You must be a student and enrolled at least half time in order to receive an unsubsidized student loan. The good news however for those who do not qualify based on needs for other student loan options is that this type of loan is available to all qualifying students regardless of need. The interest on these loans however begins to accrue immediately, which means they can really add up over time.
PLUS loans are loans that are taken out by the parents of students who need the funds in order to cover educational expenses. The maximum amount that can be borrowed is the cost of attendance minus any financial aid awards the student has already received. The repayment on these loans begins 60 days after the loan is dispersed and the repayment period can be up to 10 years.
In order to cover the costs involved in education that go above and beyond what the government recognizes as acceptable college related expenses you can opt to go the route of private student loans rather then relying solely upon federal financial aid for your student loan source. These loans require that you qualify in order to receive them based on your credit rather than your need and must be used for educational purposes only. With these particular loans you really need to make sure you read all the fine print as different companies offer different conditions and different perks. You should really take the time and compare prices and options before taking out a private student loan and this should be done only as a last resort.
Student loans for many can be the difference in attending college and getting the education you are hoping for and not being able to pay the high costs that go along with higher education. For this reason you should treat them with respect and not take them lightly.
Myths about Student Loan Refinancing Dispelled
There are many myths about student loan refinancing. Some of these myths may appear to be in your favor, while others aren't. But in most cases, consolidation can greatly benefit you, and make your academic debt much more manageable.
The truth is that each situation is unique, but there are some facts that hold true in just about any situation, and with most consolidation companies. Be aware that not every situation, loan, or lender is the same. Whatever you believe about refinancing, make sure you know the facts before dismissing or applying for the option.
Myth: You cannot refinance one student loan.
Fact: Any loan can be refinanced, but not every loan should be. You want to check into refinancing your student loan if you can get a lower interest rate.
Myth: You cannot refinance student loans that are in default.
Fact: This is simply not true. Refinancing student loans that are in default is not only possible, but it is a great help in improving credit. The old loans are paid in full, and as long as you keep up on the new loan, you will quickly see a difference in your credit score.
Myth: Student loan refinancing will always save on interest.
Fact: Some student loan companies will give you a lower interest rate when you first consolidate, but that rate may not be fixed. In the end, you could wind up with a higher interest rate. However, you will still save money by not having multiple finance charges.
Myth: Bad credit will stop you from refinancing student loans.
Fact: Just as most student loans are made regardless of credit, so it is with refinancing. Your credit will only come into play when the company determines your interest rate. Even this may not be an issue, depending on the company.
Myth: You can only refinance student loans when you have finished school.
Fact: Student loan refinancing can be done at any time. Most companies that offer refinancing options will offer the same academic deferment that the original loans carried. You still won’t be making any payments until you graduate, but you will be saving money on finance charges and possibly interest in the meantime.
Myth: Once you have refinanced, you cannot do so again.
Fact: In most cases, the agreement you sign for your consolidation will not have any provisions excluding future consolidations. Student loan refinancing can be done while you are in school, and again when you graduate.
The truth is that each situation is unique, but there are some facts that hold true in just about any situation, and with most consolidation companies. Be aware that not every situation, loan, or lender is the same. Whatever you believe about refinancing, make sure you know the facts before dismissing or applying for the option.
Myth: You cannot refinance one student loan.
Fact: Any loan can be refinanced, but not every loan should be. You want to check into refinancing your student loan if you can get a lower interest rate.
Myth: You cannot refinance student loans that are in default.
Fact: This is simply not true. Refinancing student loans that are in default is not only possible, but it is a great help in improving credit. The old loans are paid in full, and as long as you keep up on the new loan, you will quickly see a difference in your credit score.
Myth: Student loan refinancing will always save on interest.
Fact: Some student loan companies will give you a lower interest rate when you first consolidate, but that rate may not be fixed. In the end, you could wind up with a higher interest rate. However, you will still save money by not having multiple finance charges.
Myth: Bad credit will stop you from refinancing student loans.
Fact: Just as most student loans are made regardless of credit, so it is with refinancing. Your credit will only come into play when the company determines your interest rate. Even this may not be an issue, depending on the company.
Myth: You can only refinance student loans when you have finished school.
Fact: Student loan refinancing can be done at any time. Most companies that offer refinancing options will offer the same academic deferment that the original loans carried. You still won’t be making any payments until you graduate, but you will be saving money on finance charges and possibly interest in the meantime.
Myth: Once you have refinanced, you cannot do so again.
Fact: In most cases, the agreement you sign for your consolidation will not have any provisions excluding future consolidations. Student loan refinancing can be done while you are in school, and again when you graduate.
No Credit Check Student Loans Explained
No credit student loans are a myth. If you do not have good credit you cannot get funding for college. Without good credit, student loans are impossible. Do any of these statements sound familiar to you? Well don’t believe them!
The truth is that most student loans do not require good credit. In fact, the student loans you receive based on financial need do not require any type of credit check! Other student loans may require a credit check, but only for the purposes of determining your interest rate.
No credit check student loans are more common than anyone believes. These loans are generally provided based on financial need, and credit never comes into play. The government wants you to get an education, and therefore programs are in place to make that dream a reality. This is true for everyone, no matter your credit or your background.
The most common place to find no credit check student loans is through your school. The school you will attend should have their own fully staffed financial aid office. The sole purpose of this department is to help people like you find funding for college.
Most schools will have preferred lenders in which they automatically send your applications and information. Most of these lenders will offer no credit check student loans. Why? Because the schools want money! The more banks they can work with, and the more students they can get funding for, the higher the number of students that can enroll in classes, thus equaling more money in the university's pockets.
Another place you can check for no credit student loans is with private lending institutions. Some of these institutions, especially if you have a previous history with them, will not run a credit check for your student loans. Additionally, you may be able to negotiate a student loan without a credit check.
Negotiation is simply. Lenders appreciate the need for a higher education, and they are more than willing to lend money for college. If you do not have good credit, most institutions will allow you to receive a student loan without a credit check in exchange for agreeing to a higher interest rate. This is really not a bad deal, especially when you consider the refinancing options you may enjoy later in your academic career.
In the end, it doesn’t matter what your credit is like when you get those first student loans. Your credit will raise naturally over the course of your academic career as your student loans provide you with a natural means of credit. You will soon find that additional loans need not be no credit check student loans.
The truth is that most student loans do not require good credit. In fact, the student loans you receive based on financial need do not require any type of credit check! Other student loans may require a credit check, but only for the purposes of determining your interest rate.
No credit check student loans are more common than anyone believes. These loans are generally provided based on financial need, and credit never comes into play. The government wants you to get an education, and therefore programs are in place to make that dream a reality. This is true for everyone, no matter your credit or your background.
The most common place to find no credit check student loans is through your school. The school you will attend should have their own fully staffed financial aid office. The sole purpose of this department is to help people like you find funding for college.
Most schools will have preferred lenders in which they automatically send your applications and information. Most of these lenders will offer no credit check student loans. Why? Because the schools want money! The more banks they can work with, and the more students they can get funding for, the higher the number of students that can enroll in classes, thus equaling more money in the university's pockets.
Another place you can check for no credit student loans is with private lending institutions. Some of these institutions, especially if you have a previous history with them, will not run a credit check for your student loans. Additionally, you may be able to negotiate a student loan without a credit check.
Negotiation is simply. Lenders appreciate the need for a higher education, and they are more than willing to lend money for college. If you do not have good credit, most institutions will allow you to receive a student loan without a credit check in exchange for agreeing to a higher interest rate. This is really not a bad deal, especially when you consider the refinancing options you may enjoy later in your academic career.
In the end, it doesn’t matter what your credit is like when you get those first student loans. Your credit will raise naturally over the course of your academic career as your student loans provide you with a natural means of credit. You will soon find that additional loans need not be no credit check student loans.
How Consolidation of Student Loans Works
The consolidation of student loans can be a huge lifesaver. A college education is expensive, and it is almost impossible to get a degree without taking out at least a few student loans. However, these loans do not have to rule your finances for years to come.
Student loans can create a huge debt that hits you from nowhere. It is very easy to forget that you are accumulating debt while attending school. Most loans are made on an academic deferment, not requiring any payment at all until your schooling is complete. Many of these loans also accumulate interest throughout your schooling, even though no payment is required.
Six months after you graduate, or possibly less, the debt becomes a reality. Loans taken out at the beginning of your academic career may have terms of just a few years, with thousands of dollars in interest tacked onto the loan amounts, making for large payments. You must start paying on these loans right away, even if you have not yet found employment in your new occupation.
Masters degrees, doctorates, medical school and law school are some of the most expensive types of education. In these areas, you could easily accumulate hundreds of thousands of dollars in loans and interest by the time you graduate and begin working in your chosen field. In the case of doctors, you will likely be expected to begin payment on your student loans before you finish your residency. Lawyers are also expected to begin paying on loans when they complete law school, even if they have not yet taken the bar examination. In other words, you will likely have to start paying this enormous debt long before you are truly making enough money to do so.
The only way to make this debt manageable is through consolidation. Consolidation of student loans makes your student loan debt much more manageable. The lending institution that consolidates your loans begins by buying all of your educational debt. Essentially, they are paying of the student loans for you. This debt is then handled as one, newer, lump sum loan that you repay in reasonable increments.
Not only does loan consolidation make payments more manageable, it also saves you a lot of money. Many consolidation loans carry lower interest than at least some of the original loans. You also avoid multiple finance charges and late fees that can add up quickly.
Student loans can create a huge debt that hits you from nowhere. It is very easy to forget that you are accumulating debt while attending school. Most loans are made on an academic deferment, not requiring any payment at all until your schooling is complete. Many of these loans also accumulate interest throughout your schooling, even though no payment is required.
Six months after you graduate, or possibly less, the debt becomes a reality. Loans taken out at the beginning of your academic career may have terms of just a few years, with thousands of dollars in interest tacked onto the loan amounts, making for large payments. You must start paying on these loans right away, even if you have not yet found employment in your new occupation.
Masters degrees, doctorates, medical school and law school are some of the most expensive types of education. In these areas, you could easily accumulate hundreds of thousands of dollars in loans and interest by the time you graduate and begin working in your chosen field. In the case of doctors, you will likely be expected to begin payment on your student loans before you finish your residency. Lawyers are also expected to begin paying on loans when they complete law school, even if they have not yet taken the bar examination. In other words, you will likely have to start paying this enormous debt long before you are truly making enough money to do so.
The only way to make this debt manageable is through consolidation. Consolidation of student loans makes your student loan debt much more manageable. The lending institution that consolidates your loans begins by buying all of your educational debt. Essentially, they are paying of the student loans for you. This debt is then handled as one, newer, lump sum loan that you repay in reasonable increments.
Not only does loan consolidation make payments more manageable, it also saves you a lot of money. Many consolidation loans carry lower interest than at least some of the original loans. You also avoid multiple finance charges and late fees that can add up quickly.
Why Go For Student Loan Consolidation
To better understand the concept of student loan consolidation, I’m going to give you a crappy example I’ve made up just awhile ago. It’s not that good (it’s crappy), but it should be able to make the topic a bit easier to understand. Here it is: you’ve been assigned by your mom to rake the leaves on the lawn. She wants you to gather them into 5 equal piles, burn it, and distribute it to 5 of her friends (for some stupid unknown reason). You find that very unreasonable as well as difficult and time consuming. Not to mention the energy and frustration you’ll be going through while at it.
So to make things easier, you get someone else to do it for you. You pile the leaves in a big bundle and have the guy you’ve hired do all the dirty work for you. Again the example sucks, but that’s the way student loan consolidation works. I’ll explain it here: going to college is one of the most expensive events that are going to happen in your life, and it’s hard to stumble across an individual that doesn’t need to take out several loans to cope up with all the expenses. Now, student loans may in general be categorized under two types, the first being: federal student loans.
This type is given through the US Department of Education's Federal Student Aid programs, and considered the fastest and easiest type a student may get his hands on. The 2nd type is private student loans, which are obtained at financial institutions, such as the bank. Now whichever of the two you pick, there’s probably going to be a lot of them availed, which means you’ll be taking multiple loans. That means you could be paying back different lenders and paying for loans with various deadlines and interest rates, which is going to be a burden on your part. So to make things easier, you go for the method of student loan consolidation, where you put all those debts into one big "bag", which means it’s treated as a singular or consolidated loan.
That’s convenient on your part because you make single monthly payments instead of many. There’s something that you should always remember though, which is not to consolidate the federal type with the private type. You see the interest on federal student loans is tax deductible, while the interest on the private type isn’t. By combining them, you lose the tax deduction – so don’t do that. What’s going to make you eligible for this service? Well basically there are 3 determining factors, the first being: you aren’t enrolled in any school anymore. The second is you’ve shown good conduct with paying your loans.
3rd is you’re in the 6 month post-grad grace period. So what are the other benefits you should expect to gain when going for student loan consolidation (aside from convenience)? There are basically 3 advantages for you to gain here, namely: a lower rate of interest and reduction of monthly payments as the loan payback period is increased to 30 years. When you graduate, you’re going to have to pay everything you own back (obviously). So to make things easier for yourself, consolidate them.
So to make things easier, you get someone else to do it for you. You pile the leaves in a big bundle and have the guy you’ve hired do all the dirty work for you. Again the example sucks, but that’s the way student loan consolidation works. I’ll explain it here: going to college is one of the most expensive events that are going to happen in your life, and it’s hard to stumble across an individual that doesn’t need to take out several loans to cope up with all the expenses. Now, student loans may in general be categorized under two types, the first being: federal student loans.
This type is given through the US Department of Education's Federal Student Aid programs, and considered the fastest and easiest type a student may get his hands on. The 2nd type is private student loans, which are obtained at financial institutions, such as the bank. Now whichever of the two you pick, there’s probably going to be a lot of them availed, which means you’ll be taking multiple loans. That means you could be paying back different lenders and paying for loans with various deadlines and interest rates, which is going to be a burden on your part. So to make things easier, you go for the method of student loan consolidation, where you put all those debts into one big "bag", which means it’s treated as a singular or consolidated loan.
That’s convenient on your part because you make single monthly payments instead of many. There’s something that you should always remember though, which is not to consolidate the federal type with the private type. You see the interest on federal student loans is tax deductible, while the interest on the private type isn’t. By combining them, you lose the tax deduction – so don’t do that. What’s going to make you eligible for this service? Well basically there are 3 determining factors, the first being: you aren’t enrolled in any school anymore. The second is you’ve shown good conduct with paying your loans.
3rd is you’re in the 6 month post-grad grace period. So what are the other benefits you should expect to gain when going for student loan consolidation (aside from convenience)? There are basically 3 advantages for you to gain here, namely: a lower rate of interest and reduction of monthly payments as the loan payback period is increased to 30 years. When you graduate, you’re going to have to pay everything you own back (obviously). So to make things easier for yourself, consolidate them.
Student Loan Consolidation and Solve your Student Loan Problems
Opt for Student Loan Consolidation and Solve your Student Loan Problems
Students who have made loans just to finish their college studies are now looking to find ways to pay back their loans. Student loan consolidation is being offered in answer to the problems students are facing after graduating in college via student loans. Because most find it hard to look for a high paying job after graduation, they are having a hard time paying for their loan or loans for that matter. For those who have more than one loan, then you need to consolidate college loans. This is your option to avoid mounting up of unpaid loans while you are working on temporary or low paying jobs.
What is student loan consolidation? For students who have the need to come up with funds more than what one loan company could offer get multiple loans from several companies. Come paying time, there will be separate and individual bills coming from the companies where they got the loan. In cases where the graduate is not able to find a job a right away, there is a need to consolidate college loans. Once you consolidate your loan, instead of paying outrageous monthly dues, which is estimated to reach $300 up to $1000 you can reduce it to a minimum of $100 per month.
Student loan consolidation is your ultimate solution to the student loans problem while you are on a professional job hunt. As there are lots of companies offering private student loan consolidation all you have to do is find one that offers the lowest interest rate. In addition, you need to check out on the company, which offers a fast and quick process so you need not spend much time on the processing, instead of utilizing it to find work. You can easily hunt for a company that offers direct loan consolidation. You can now consolidate college loans without having to worry about it every night and day, while being pressured on your job hunt.
One thing you need to consider when opting for a student loan consolidation is that you can only take one loan consolidation. Once you fail to find a job to pay for the outstanding loan, you will have to use another option of paying your current student loan. One option many have used in the forbearance, just to have a temporary break on a student loan problem. Before you select which private student loan consolidation company you should choose, make a thorough research first. Know your option and calculate how much you will likely pay for your consolidated student loans by using the repayment calculator online.
One good move is also to talk to the various companies that offer to consolidate private student loans. They know better and could direct you and show the different options open for you. Lighten your worries on student loans by opting for student loan consolidation and rest easy while you find the right and high paying job after working so hard throughout your college life.
Students who have made loans just to finish their college studies are now looking to find ways to pay back their loans. Student loan consolidation is being offered in answer to the problems students are facing after graduating in college via student loans. Because most find it hard to look for a high paying job after graduation, they are having a hard time paying for their loan or loans for that matter. For those who have more than one loan, then you need to consolidate college loans. This is your option to avoid mounting up of unpaid loans while you are working on temporary or low paying jobs.
What is student loan consolidation? For students who have the need to come up with funds more than what one loan company could offer get multiple loans from several companies. Come paying time, there will be separate and individual bills coming from the companies where they got the loan. In cases where the graduate is not able to find a job a right away, there is a need to consolidate college loans. Once you consolidate your loan, instead of paying outrageous monthly dues, which is estimated to reach $300 up to $1000 you can reduce it to a minimum of $100 per month.
Student loan consolidation is your ultimate solution to the student loans problem while you are on a professional job hunt. As there are lots of companies offering private student loan consolidation all you have to do is find one that offers the lowest interest rate. In addition, you need to check out on the company, which offers a fast and quick process so you need not spend much time on the processing, instead of utilizing it to find work. You can easily hunt for a company that offers direct loan consolidation. You can now consolidate college loans without having to worry about it every night and day, while being pressured on your job hunt.
One thing you need to consider when opting for a student loan consolidation is that you can only take one loan consolidation. Once you fail to find a job to pay for the outstanding loan, you will have to use another option of paying your current student loan. One option many have used in the forbearance, just to have a temporary break on a student loan problem. Before you select which private student loan consolidation company you should choose, make a thorough research first. Know your option and calculate how much you will likely pay for your consolidated student loans by using the repayment calculator online.
One good move is also to talk to the various companies that offer to consolidate private student loans. They know better and could direct you and show the different options open for you. Lighten your worries on student loans by opting for student loan consolidation and rest easy while you find the right and high paying job after working so hard throughout your college life.
How to Find Low Interest Student Loans
Having a low interest rate is obviously a good thing for borrowers obtaining any type of loan, but when it comes to student loans, they may be even more important. Low interest student loans are the only way to get through your education without racking up a mound of student loan debt in the process. If you think about it, for many people student loan debt will be their second biggest financial burden aside from a mortgage. Here are some examples...
If you have to borrow ten thousand dollars per year for college, and you go to school for just four years, you have borrowed forty thousand dollars. Those are some pretty hefty numbers. Now figure that you are paying at least six percent interest on those loans while you aren’t paying on them. By the time you graduate you will owe six thousand dollars in interest on the principal alone! That does not include any finance charges that may also apply.
It is very easy to forget how much interest you are racking up while you are in school. Most, if not all, of your student loans do not have to be paid until after you graduate. Since you are not making any payments, you don’t tend to think about how much academic debt you are really accumulating. This is one of the biggest mistakes students can make when it comes to student loan management. You have to stay on top of your student loan debt whether you are already paying on it or not.
Some people become confused by the financial aid process. They think that because they do not have to pay on their student loans while they are in school, all of their loans must be subsidized, and therefore are not accruing interest. This is not the case. Unsubsidized student loans are often given with an academic deferment. A deferment allows you to wait to make payments much the same as subsidized loans, but interest continues to accrue throughout the period.
This is why low interest student loans are so important. The lower your interest, the less it costs for you to go to school. Additionally, you can lower the amount of money you have to pay when you graduate by paying the interest on your unsubsidized loans throughout your academic career. This lowers your expenses after school dramatically. If you have low interest student loans, this is much easier to work into your meager budget while you are still in college.
Contrary to popular belief, low interest student loans are quite easy to find and obtain. Many of them do not even require a credit check. In truth, most unsubsidized loans are made based on financial need rather than on credit, making them much easier to obtain and making interest rates much lower. In the end, your student loan debt becomes much easier to maintain and manage as you reach completion of your degree and eventually find a career in your chosen field of expertise.
If you have to borrow ten thousand dollars per year for college, and you go to school for just four years, you have borrowed forty thousand dollars. Those are some pretty hefty numbers. Now figure that you are paying at least six percent interest on those loans while you aren’t paying on them. By the time you graduate you will owe six thousand dollars in interest on the principal alone! That does not include any finance charges that may also apply.
It is very easy to forget how much interest you are racking up while you are in school. Most, if not all, of your student loans do not have to be paid until after you graduate. Since you are not making any payments, you don’t tend to think about how much academic debt you are really accumulating. This is one of the biggest mistakes students can make when it comes to student loan management. You have to stay on top of your student loan debt whether you are already paying on it or not.
Some people become confused by the financial aid process. They think that because they do not have to pay on their student loans while they are in school, all of their loans must be subsidized, and therefore are not accruing interest. This is not the case. Unsubsidized student loans are often given with an academic deferment. A deferment allows you to wait to make payments much the same as subsidized loans, but interest continues to accrue throughout the period.
This is why low interest student loans are so important. The lower your interest, the less it costs for you to go to school. Additionally, you can lower the amount of money you have to pay when you graduate by paying the interest on your unsubsidized loans throughout your academic career. This lowers your expenses after school dramatically. If you have low interest student loans, this is much easier to work into your meager budget while you are still in college.
Contrary to popular belief, low interest student loans are quite easy to find and obtain. Many of them do not even require a credit check. In truth, most unsubsidized loans are made based on financial need rather than on credit, making them much easier to obtain and making interest rates much lower. In the end, your student loan debt becomes much easier to maintain and manage as you reach completion of your degree and eventually find a career in your chosen field of expertise.
Worried About Student Loans, Bad Credit Causing Problems?
Thankfully for most students and parents, student loans, bad credit problems or little credit now have almost nothing to do with each other as long as you avoid private student loans that use your credit score as a tool in determining the loan. In the past several issues have prevented students from getting student loans, bad credit being one of the most common. Private lenders can still use your credit score to eliminate you from getting a loan, however federal government loans don't use your credit report, meaning that limiting student loans, bad credit issues, or other financial problem cannot exclude you from qualifying for a loan.
The various types of funds for education that don't require a credit check include Stafford and Perkins federal loans, Pell grants, private grants, school based scholarships, government or private types of grants that are offered outside of the standard loan programs. People that want to apply for student loans, bad credit or no credit in their history, can focus on these types of applications and programs that prevent the need for any credit checks.
Usually for most students seeking student loans, bad credit is not as big of a problem as no credit history at all. For these young adults their parent's, spouses or even friends with good credit can ask as co-signers on the loan, using that credit score for private lenders that require this information. The better the credit score the lower the interest rate will typically be on the loan. Avoid lenders that indicate they don't check your credit score, they are likely charging additional fees somewhere that will add up to more than the higher interest rate would in the long run.
The biggest issue for returning mature students is that often the original student loans have been mismanaged and are the biggest issue on their credit score. If you are planning on obtaining a student loan and know that you have a bad or low credit score, the first thing is to work with a financial consultant or professional credit counselor to get your credit score into shape. This usually means apply for and managing some secured credit cards that can show you pay your bills on time. It may also mean consolidating your outstanding student loans, bad credit issues and other loans into one lower, manageable monthly payment and showing a good payment history for six months to a year. While this may mean delaying your return to school, it will actually provide you a greater opportunity to save up for tuition and education costs, plus you will also repair your credit rating and decrease the overal interest you will have to pay on your loan.
The various types of funds for education that don't require a credit check include Stafford and Perkins federal loans, Pell grants, private grants, school based scholarships, government or private types of grants that are offered outside of the standard loan programs. People that want to apply for student loans, bad credit or no credit in their history, can focus on these types of applications and programs that prevent the need for any credit checks.
Usually for most students seeking student loans, bad credit is not as big of a problem as no credit history at all. For these young adults their parent's, spouses or even friends with good credit can ask as co-signers on the loan, using that credit score for private lenders that require this information. The better the credit score the lower the interest rate will typically be on the loan. Avoid lenders that indicate they don't check your credit score, they are likely charging additional fees somewhere that will add up to more than the higher interest rate would in the long run.
The biggest issue for returning mature students is that often the original student loans have been mismanaged and are the biggest issue on their credit score. If you are planning on obtaining a student loan and know that you have a bad or low credit score, the first thing is to work with a financial consultant or professional credit counselor to get your credit score into shape. This usually means apply for and managing some secured credit cards that can show you pay your bills on time. It may also mean consolidating your outstanding student loans, bad credit issues and other loans into one lower, manageable monthly payment and showing a good payment history for six months to a year. While this may mean delaying your return to school, it will actually provide you a greater opportunity to save up for tuition and education costs, plus you will also repair your credit rating and decrease the overal interest you will have to pay on your loan.
Saturday, May 23, 2009
Personal Finance. Credit Agencies Refused Access To Information About Student Loans
These days, when you apply for a mortgage, loan or other form of credit, the lending industry will automatically scrutinise your personal credit history. In practice, you hardly need to tell them anything as within a fraction of a second, the lenders computers will lock into your credit file held by any one of the big three credit agencies; Experian, Callcredit or Equifax And you'll be amazed what they know about your finances!
For many years now banks, building societies and other lenders have been providing information about your finances to the credit agencies. They know about every credit applications you've made, the occasions you've been late or missed paying a loan, mortgage or credit card, the balances on your loans and credit cards and whether you just pay off the minimum each month - even your credit limits! The agencies also accumulated lots of other information about you provided by public records, the voters' roll and the public register of court actions where all county court judgements are recorded. Their computers then statistically analyse all this information and assess your application. So in this context, the credit industry argues that the more information they have about you, the more accurately lenders can make lending decisions.
Yet within this mass of information, there is one notable omission. Despite representations to the government, information about student loans and their repayment history's, is not provided to the credit agencies. The data is refused because student loans are a debt to the taxpayer, not a commercial business.
Prior to September 1998, graduates repaid their student loans by mortgage style direct debits collected once the graduate started earning over £15,000. But more than 59,000 of graduates from before 1998 graduates are understood to be in payment arrears to the tune, on average, of around £2,750 per graduate.
After September 1998, the system of collecting student loans changed. These days, repayments are deducted directly from salaries by employers along with national insurance and income tax. This method is far more efficient and avoids the possibility of bad debts.
The credit industry argues that it needs the information on student loans as they can represent a significant strain on the graduates' finances – especially following the introduction of top-up fees which results in the average student loans being much larger. These loans are repaid at the rate of 9% of the graduates' income in excess of £15,000 and can represent a significant drain on their monthly income.
Therefore, to fully assess graduates' financial situation the credit industry argues that it needs student loan information. The Association Consumer Credit Counselling Service agrees. A spokes person said, “Knowing whether a young person has a student loan and whether it is being paid back, is useful.”
Yet despite the pressure to share its information, the Department for Education and Skills remains steadfast in its decision to refuse permission to the Student Loan Company to provide information to the commercial sector.
Even the Citizens Advice Bureau wants this decision changed arguing that lenders need information on student loans to help ensure that graduates avoid taking on so much debt that they can't maintain their repayments.
But for now at least, the situation remains. The credit industry cannot obtain any history about student loans.
For many years now banks, building societies and other lenders have been providing information about your finances to the credit agencies. They know about every credit applications you've made, the occasions you've been late or missed paying a loan, mortgage or credit card, the balances on your loans and credit cards and whether you just pay off the minimum each month - even your credit limits! The agencies also accumulated lots of other information about you provided by public records, the voters' roll and the public register of court actions where all county court judgements are recorded. Their computers then statistically analyse all this information and assess your application. So in this context, the credit industry argues that the more information they have about you, the more accurately lenders can make lending decisions.
Yet within this mass of information, there is one notable omission. Despite representations to the government, information about student loans and their repayment history's, is not provided to the credit agencies. The data is refused because student loans are a debt to the taxpayer, not a commercial business.
Prior to September 1998, graduates repaid their student loans by mortgage style direct debits collected once the graduate started earning over £15,000. But more than 59,000 of graduates from before 1998 graduates are understood to be in payment arrears to the tune, on average, of around £2,750 per graduate.
After September 1998, the system of collecting student loans changed. These days, repayments are deducted directly from salaries by employers along with national insurance and income tax. This method is far more efficient and avoids the possibility of bad debts.
The credit industry argues that it needs the information on student loans as they can represent a significant strain on the graduates' finances – especially following the introduction of top-up fees which results in the average student loans being much larger. These loans are repaid at the rate of 9% of the graduates' income in excess of £15,000 and can represent a significant drain on their monthly income.
Therefore, to fully assess graduates' financial situation the credit industry argues that it needs student loan information. The Association Consumer Credit Counselling Service agrees. A spokes person said, “Knowing whether a young person has a student loan and whether it is being paid back, is useful.”
Yet despite the pressure to share its information, the Department for Education and Skills remains steadfast in its decision to refuse permission to the Student Loan Company to provide information to the commercial sector.
Even the Citizens Advice Bureau wants this decision changed arguing that lenders need information on student loans to help ensure that graduates avoid taking on so much debt that they can't maintain their repayments.
But for now at least, the situation remains. The credit industry cannot obtain any history about student loans.
Personal Finance. Student Loans Debts Do Not Go On Your Credit Record.
Every time you apply for credit, for example a credit card or a loan, the lender will request to see your credit history from a credit reference agency. The information they hold is so detailed that there's really no need for us to fill out that long application form, because within a fraction of a second they can see all they need to know from Experian, Equifax or Callcredit, the three main credit reference agencies. You would be very surprised to see just how much they know about you.
Banks, building societies and other financial institutions providing credit have been passing on details of your financial transactions to the credit agencies. Every time you apply for a credit card, every time you miss a mortgage repayment – it gets noted. They know whether you pay the minimum or the balance each month, they even know details of your credit limit on each credit card. They also look to public records, the voters' roll and the public register of court actions because that is where all county court judgements are listed. It all happens automatically, and when your credit history is requested, the computer will provide a statistical analysis of your financial habits and provide an assessment of your suitability. It enables, the industry argues, lenders to make an accurate judgement about whether they should lend you money or not.
However, there is one piece of financial information that the credit agencies are not allowed to access, and that's the student loans. Despite the industry's remonstrations to the government, nothing has changed, and they are not allowed to access the information. The reason? Student loans constitute a debt to the taxpayer, they were not funded by commercial business.
Before September 1998, the student loan system worked like this: once graduates were working and earning the national average, which was £15,000 at the time, they had to repay their loan on a monthly basis by direct debit. 59,000 of those pre-1998 graduates still haven't started repaying their loan, and each has on average a debt of £2,750.
In September 1998, the student loan system changed, and the system remains the same to this day. Now, repayments are taken directly at source, straight from the salary in the same way as national insurance and income tax. This method has been a lot more successful.
The lending industry is not happy about the student loan situation, their main argument being that they need to know, when considering an application for credit, if the applicant has extra financial responsibilities. The introduction of top-up fees resulted in increasingly large student debts, and as the post-1998 loans have to be paid off at a rate of 9% of the graduate's income once it has reached £15,000, it is a large portion of income to lose.
The Association Consumer Credit Counselling Service made the following statement: “Knowing whether a young person has a student loan and whether it is being paid back, is useful.” So they are in agreement with the lenders.
The Citizens Advice Bureau is also keen to have the information made public, because they feel that graduates could be taking on too much debt, and if lenders could see their student loans, they would ensure that graduates are not given the ability to borrow beyond their means.
However, the Department for Education and Skills is showing no signs of wavering on its decision to keep individuals' debts to the Student Loan Company private.
For the foreseeable future – the situation will remain the same and student loans information will be inaccessible to the credit industry.
Banks, building societies and other financial institutions providing credit have been passing on details of your financial transactions to the credit agencies. Every time you apply for a credit card, every time you miss a mortgage repayment – it gets noted. They know whether you pay the minimum or the balance each month, they even know details of your credit limit on each credit card. They also look to public records, the voters' roll and the public register of court actions because that is where all county court judgements are listed. It all happens automatically, and when your credit history is requested, the computer will provide a statistical analysis of your financial habits and provide an assessment of your suitability. It enables, the industry argues, lenders to make an accurate judgement about whether they should lend you money or not.
However, there is one piece of financial information that the credit agencies are not allowed to access, and that's the student loans. Despite the industry's remonstrations to the government, nothing has changed, and they are not allowed to access the information. The reason? Student loans constitute a debt to the taxpayer, they were not funded by commercial business.
Before September 1998, the student loan system worked like this: once graduates were working and earning the national average, which was £15,000 at the time, they had to repay their loan on a monthly basis by direct debit. 59,000 of those pre-1998 graduates still haven't started repaying their loan, and each has on average a debt of £2,750.
In September 1998, the student loan system changed, and the system remains the same to this day. Now, repayments are taken directly at source, straight from the salary in the same way as national insurance and income tax. This method has been a lot more successful.
The lending industry is not happy about the student loan situation, their main argument being that they need to know, when considering an application for credit, if the applicant has extra financial responsibilities. The introduction of top-up fees resulted in increasingly large student debts, and as the post-1998 loans have to be paid off at a rate of 9% of the graduate's income once it has reached £15,000, it is a large portion of income to lose.
The Association Consumer Credit Counselling Service made the following statement: “Knowing whether a young person has a student loan and whether it is being paid back, is useful.” So they are in agreement with the lenders.
The Citizens Advice Bureau is also keen to have the information made public, because they feel that graduates could be taking on too much debt, and if lenders could see their student loans, they would ensure that graduates are not given the ability to borrow beyond their means.
However, the Department for Education and Skills is showing no signs of wavering on its decision to keep individuals' debts to the Student Loan Company private.
For the foreseeable future – the situation will remain the same and student loans information will be inaccessible to the credit industry.
Student Loans And The Price Of An Education
The average student entering higher education will now leave university with debts of around £10,000. This is made up from a combination of student loans, credit cards and overdrafts. This figure however is set to sky rocket as Barclays predicts students graduating in 2010 will be facing £30,000 of debt.
Although some figures show that graduates can expect higher than average earnings, students may not actually be in well-paid jobs for a number of years after graduating leaving. Unfortunately for some, this premium in earnings may never even be enough to clear their accumulated personal debt.
The best way to avoid the struggle is to learn about and prepare yourself for each cost involved over the period of our course including the time it may take you to find a job afterwards.
Firstly, tuition fees - these pay for the actual course you want to take. Before 1999 the Government covered the entire cost. However now, a growing appetite for higher education forced the Government to change the system. This was also justified by claims that during the course of their working lives, a graduate could earn £400,000 more than a non-graduate.
However, not everyone has to pay tuition fees. If your parents' combined earnings are under a certain threshold they will not have to pay. From the threshold upward, the contributions operate on a sliding scale.
Although, regardless of their earnings, the maximum any family has to pay amounts to around a quarter of the entire cost of the course each year. This is estimated to be around £4,000 and the Government will still pick up the bill for the remaining amount.
As soon as you are accepted into a course you should apply to your Local Education Authority (LEA) to find out what sort of financial help you can obtain.
Thinking of taking out a loan to fund your course? Most students will need to take out one or more student loans to cover their day-to-day living. These are unsecured loans with an especially low interest rate that reflects the rate of inflation meaning you only pay back the exact amount you borrowed.
If you are going to take out a loan you should contact your LEA at the same time you apply for support towards tuition fees. Your LEA will assess the amount of loan you are entitled to and invite you to request how much you want to apply for. You must then tell the Student Loans Company (SLC) of the amount agreed and it will pay the money into your account on the first day of term. Note also that you are eligible for more funds if you are studying in London.
You can apply for one loan for each year of your course and you do not have to start making repayments until the April (end of tax year) after you graduate. From then on, you will only start paying back the loan if you are earning above a certain threshold.
Then the amount you pay back each month will depend on how much you are earning. In the unlikely event that you never earn over the threshold, the loan will be cleared when you turn 65.
Alternatively, most of the big banks will offer an interest-free overdraft facility on their student accounts in the hope that you will stay loyal to them when you start earning in the future.
The amount you get on an overdraft will depend on the bank and will apply to all its student applicants but the usual amount is around £2,000 and it is interest-free.
Although the overdraft will not cost you anything if you stay within your limit, if you should go beyond it, you’ll be charged a hefty interest rate on the difference. You may also be hit with a one-off unauthorised overdraft fee as well.
There is no specific time limit for repaying the overdraft. But after leaving university, the interest-free perk will no longer be available and you will be charged at the same high rates that apply to overdrafts on standard current accounts. It is worth noting that some banks provide a grace period after graduation before the higher rate will kick in.
Another option is of course the old fashioned credit card. However, these rarely carry privileged terms for students. If you take a credit card from a bank you will have to pay exactly the same high interest rates as everyone else. The only difference will be as a student, your credit limit will be lower. Most will find, with credit cards, they will sit on their maxed out balance and pay interest for three years forgetting what the spent the money on in the first place.
Although there are many money lending options for student, seventy per cent of university students’ still finds money a problem and half will have part-time jobs as well as loans. Most students admit they are worried about debt but believe it is unavoidable. Know and research your options carefully and avoid getting into any unnecessary debt, such as credit cards until you have some sort of income.
Although some figures show that graduates can expect higher than average earnings, students may not actually be in well-paid jobs for a number of years after graduating leaving. Unfortunately for some, this premium in earnings may never even be enough to clear their accumulated personal debt.
The best way to avoid the struggle is to learn about and prepare yourself for each cost involved over the period of our course including the time it may take you to find a job afterwards.
Firstly, tuition fees - these pay for the actual course you want to take. Before 1999 the Government covered the entire cost. However now, a growing appetite for higher education forced the Government to change the system. This was also justified by claims that during the course of their working lives, a graduate could earn £400,000 more than a non-graduate.
However, not everyone has to pay tuition fees. If your parents' combined earnings are under a certain threshold they will not have to pay. From the threshold upward, the contributions operate on a sliding scale.
Although, regardless of their earnings, the maximum any family has to pay amounts to around a quarter of the entire cost of the course each year. This is estimated to be around £4,000 and the Government will still pick up the bill for the remaining amount.
As soon as you are accepted into a course you should apply to your Local Education Authority (LEA) to find out what sort of financial help you can obtain.
Thinking of taking out a loan to fund your course? Most students will need to take out one or more student loans to cover their day-to-day living. These are unsecured loans with an especially low interest rate that reflects the rate of inflation meaning you only pay back the exact amount you borrowed.
If you are going to take out a loan you should contact your LEA at the same time you apply for support towards tuition fees. Your LEA will assess the amount of loan you are entitled to and invite you to request how much you want to apply for. You must then tell the Student Loans Company (SLC) of the amount agreed and it will pay the money into your account on the first day of term. Note also that you are eligible for more funds if you are studying in London.
You can apply for one loan for each year of your course and you do not have to start making repayments until the April (end of tax year) after you graduate. From then on, you will only start paying back the loan if you are earning above a certain threshold.
Then the amount you pay back each month will depend on how much you are earning. In the unlikely event that you never earn over the threshold, the loan will be cleared when you turn 65.
Alternatively, most of the big banks will offer an interest-free overdraft facility on their student accounts in the hope that you will stay loyal to them when you start earning in the future.
The amount you get on an overdraft will depend on the bank and will apply to all its student applicants but the usual amount is around £2,000 and it is interest-free.
Although the overdraft will not cost you anything if you stay within your limit, if you should go beyond it, you’ll be charged a hefty interest rate on the difference. You may also be hit with a one-off unauthorised overdraft fee as well.
There is no specific time limit for repaying the overdraft. But after leaving university, the interest-free perk will no longer be available and you will be charged at the same high rates that apply to overdrafts on standard current accounts. It is worth noting that some banks provide a grace period after graduation before the higher rate will kick in.
Another option is of course the old fashioned credit card. However, these rarely carry privileged terms for students. If you take a credit card from a bank you will have to pay exactly the same high interest rates as everyone else. The only difference will be as a student, your credit limit will be lower. Most will find, with credit cards, they will sit on their maxed out balance and pay interest for three years forgetting what the spent the money on in the first place.
Although there are many money lending options for student, seventy per cent of university students’ still finds money a problem and half will have part-time jobs as well as loans. Most students admit they are worried about debt but believe it is unavoidable. Know and research your options carefully and avoid getting into any unnecessary debt, such as credit cards until you have some sort of income.
Student Loans And The Price Of An Education
The average student entering higher education will now leave university with debts of around £10,000. This is made up from a combination of student loans, credit cards and overdrafts. This figure however is set to sky rocket as Barclays predicts students graduating in 2010 will be facing £30,000 of debt.
Although some figures show that graduates can expect higher than average earnings, students may not actually be in well-paid jobs for a number of years after graduating leaving. Unfortunately for some, this premium in earnings may never even be enough to clear their accumulated personal debt.
The best way to avoid the struggle is to learn about and prepare yourself for each cost involved over the period of our course including the time it may take you to find a job afterwards.
Firstly, tuition fees - these pay for the actual course you want to take. Before 1999 the Government covered the entire cost. However now, a growing appetite for higher education forced the Government to change the system. This was also justified by claims that during the course of their working lives, a graduate could earn £400,000 more than a non-graduate.
However, not everyone has to pay tuition fees. If your parents' combined earnings are under a certain threshold they will not have to pay. From the threshold upward, the contributions operate on a sliding scale.
Although, regardless of their earnings, the maximum any family has to pay amounts to around a quarter of the entire cost of the course each year. This is estimated to be around £4,000 and the Government will still pick up the bill for the remaining amount.
As soon as you are accepted into a course you should apply to your Local Education Authority (LEA) to find out what sort of financial help you can obtain.
Thinking of taking out a loan to fund your course? Most students will need to take out one or more student loans to cover their day-to-day living. These are unsecured loans with an especially low interest rate that reflects the rate of inflation meaning you only pay back the exact amount you borrowed.
If you are going to take out a loan you should contact your LEA at the same time you apply for support towards tuition fees. Your LEA will assess the amount of loan you are entitled to and invite you to request how much you want to apply for. You must then tell the Student Loans Company (SLC) of the amount agreed and it will pay the money into your account on the first day of term. Note also that you are eligible for more funds if you are studying in London.
You can apply for one loan for each year of your course and you do not have to start making repayments until the April (end of tax year) after you graduate. From then on, you will only start paying back the loan if you are earning above a certain threshold.
Then the amount you pay back each month will depend on how much you are earning. In the unlikely event that you never earn over the threshold, the loan will be cleared when you turn 65.
Alternatively, most of the big banks will offer an interest-free overdraft facility on their student accounts in the hope that you will stay loyal to them when you start earning in the future.
The amount you get on an overdraft will depend on the bank and will apply to all its student applicants but the usual amount is around £2,000 and it is interest-free.
Although the overdraft will not cost you anything if you stay within your limit, if you should go beyond it, you’ll be charged a hefty interest rate on the difference. You may also be hit with a one-off unauthorised overdraft fee as well.
There is no specific time limit for repaying the overdraft. But after leaving university, the interest-free perk will no longer be available and you will be charged at the same high rates that apply to overdrafts on standard current accounts. It is worth noting that some banks provide a grace period after graduation before the higher rate will kick in.
Another option is of course the old fashioned credit card. However, these rarely carry privileged terms for students. If you take a credit card from a bank you will have to pay exactly the same high interest rates as everyone else. The only difference will be as a student, your credit limit will be lower. Most will find, with credit cards, they will sit on their maxed out balance and pay interest for three years forgetting what the spent the money on in the first place.
Although there are many money lending options for student, seventy per cent of university students’ still finds money a problem and half will have part-time jobs as well as loans. Most students admit they are worried about debt but believe it is unavoidable. Know and research your options carefully and avoid getting into any unnecessary debt, such as credit cards until you have some sort of income.
Although some figures show that graduates can expect higher than average earnings, students may not actually be in well-paid jobs for a number of years after graduating leaving. Unfortunately for some, this premium in earnings may never even be enough to clear their accumulated personal debt.
The best way to avoid the struggle is to learn about and prepare yourself for each cost involved over the period of our course including the time it may take you to find a job afterwards.
Firstly, tuition fees - these pay for the actual course you want to take. Before 1999 the Government covered the entire cost. However now, a growing appetite for higher education forced the Government to change the system. This was also justified by claims that during the course of their working lives, a graduate could earn £400,000 more than a non-graduate.
However, not everyone has to pay tuition fees. If your parents' combined earnings are under a certain threshold they will not have to pay. From the threshold upward, the contributions operate on a sliding scale.
Although, regardless of their earnings, the maximum any family has to pay amounts to around a quarter of the entire cost of the course each year. This is estimated to be around £4,000 and the Government will still pick up the bill for the remaining amount.
As soon as you are accepted into a course you should apply to your Local Education Authority (LEA) to find out what sort of financial help you can obtain.
Thinking of taking out a loan to fund your course? Most students will need to take out one or more student loans to cover their day-to-day living. These are unsecured loans with an especially low interest rate that reflects the rate of inflation meaning you only pay back the exact amount you borrowed.
If you are going to take out a loan you should contact your LEA at the same time you apply for support towards tuition fees. Your LEA will assess the amount of loan you are entitled to and invite you to request how much you want to apply for. You must then tell the Student Loans Company (SLC) of the amount agreed and it will pay the money into your account on the first day of term. Note also that you are eligible for more funds if you are studying in London.
You can apply for one loan for each year of your course and you do not have to start making repayments until the April (end of tax year) after you graduate. From then on, you will only start paying back the loan if you are earning above a certain threshold.
Then the amount you pay back each month will depend on how much you are earning. In the unlikely event that you never earn over the threshold, the loan will be cleared when you turn 65.
Alternatively, most of the big banks will offer an interest-free overdraft facility on their student accounts in the hope that you will stay loyal to them when you start earning in the future.
The amount you get on an overdraft will depend on the bank and will apply to all its student applicants but the usual amount is around £2,000 and it is interest-free.
Although the overdraft will not cost you anything if you stay within your limit, if you should go beyond it, you’ll be charged a hefty interest rate on the difference. You may also be hit with a one-off unauthorised overdraft fee as well.
There is no specific time limit for repaying the overdraft. But after leaving university, the interest-free perk will no longer be available and you will be charged at the same high rates that apply to overdrafts on standard current accounts. It is worth noting that some banks provide a grace period after graduation before the higher rate will kick in.
Another option is of course the old fashioned credit card. However, these rarely carry privileged terms for students. If you take a credit card from a bank you will have to pay exactly the same high interest rates as everyone else. The only difference will be as a student, your credit limit will be lower. Most will find, with credit cards, they will sit on their maxed out balance and pay interest for three years forgetting what the spent the money on in the first place.
Although there are many money lending options for student, seventy per cent of university students’ still finds money a problem and half will have part-time jobs as well as loans. Most students admit they are worried about debt but believe it is unavoidable. Know and research your options carefully and avoid getting into any unnecessary debt, such as credit cards until you have some sort of income.
How Student Loans Work
Students have many options for financing the cost of college. Loans are just some of those options. However, all avenues for securing scholarships and grants should be pursued before trying to find a loan. This is because scholarships and grants do not have to be paid back, while loans do. There are many different types of loans available for consideration, and many factors of which you should be aware.
First of all, it’s best to get your Free Application for Federal Student Aid (FAFSA) in early. In fact, it should be turned in as soon as you or your parents have mailed in your annual income tax forms. While the federal government uses this information in order to assess your need for aid, state governments also offer grants based on your form. Most of the time these state grants are first come first served, so the earlier you apply the better chance you have of receiving this type of financial aid. Also, this is the method in which you apply for government loans as well.
If you find you did not receive enough aid to cover your expenses, move on to applying for a loan. There are several types of government loans to consider. The first is a Parent Loan for Undergraduate Students (PLUS) which puts the responsibility of repayment on parents, at an interest rate that’s currently 8.5 percent. There is no limit on the funds, and repayment must begin 60 days after disbursement with no grace period. There is a credit check involved. If the parents are denied the loan, the student will have an increased limit when they apply for Stafford loans.
Stafford loans are either disbursed by banks or directly by the federal government. There are subsidized loans, meaning the government pays the interest while you are in school. They are based on need. There are also unsubsidized loans in which you are responsible for the interest which accrues. They are not need based. However, you can elect to defer the interest payments until after graduation. Students are not required to repay these loans until six months after they graduate. Loan caps differ depending upon how far along you are in your schooling. Freshmen can borrow up to $3,500, sophomores up to $4,500, and juniors and seniors $5,000. The limits increase if you are an independent student, your parents were denied a PLUS loan, or if you are a graduate student. These loans currently have a fixed interest rate of 6.8 percent, but some lenders may offer rate reductions based upon your career path, such as for teachers or nurses.
A school based loan, offered with funds provided by the government, is called the Perkins Loan. It is need based, subsidized, and currently has a fixed interest rate of 5 percent. Undergraduates are eligible to receive up to $4,000 per year, while graduate students can receive up to $6,000. Your school’s financial aid office determines if you are eligible to receive this type of loan.
A first time borrower can expect his or her loan funds to be delayed by about a month after those of someone who has borrowed before. This means you should apply for your loan as soon as possible. You will also be required to take an entrance interview in order to receive your payments. You will probably be able to take this interview online. Your financial aid office will assist you in completing the interview.
If you know you are going to need loan money to cover college expenses, check with your school’s financial aid office. Some schools do not accept Stafford loans, so you would need to make other arrangements for a loan or find a school that will accept one. Private loans from banks are an option, but be aware that most of the time you will be required to repay them without a grace period. There are some, such as one offered through U-promise, that can be deferred until after graduation. Also, since they are based upon credit scores, many students may not qualify due to a lack of credit history.
Don’t wait until the last minute. Get your FAFSA filled out, and explore all of your options regarding paying for college. This will ensure a smooth transition and better prepare you for any setbacks that may come along.
First of all, it’s best to get your Free Application for Federal Student Aid (FAFSA) in early. In fact, it should be turned in as soon as you or your parents have mailed in your annual income tax forms. While the federal government uses this information in order to assess your need for aid, state governments also offer grants based on your form. Most of the time these state grants are first come first served, so the earlier you apply the better chance you have of receiving this type of financial aid. Also, this is the method in which you apply for government loans as well.
If you find you did not receive enough aid to cover your expenses, move on to applying for a loan. There are several types of government loans to consider. The first is a Parent Loan for Undergraduate Students (PLUS) which puts the responsibility of repayment on parents, at an interest rate that’s currently 8.5 percent. There is no limit on the funds, and repayment must begin 60 days after disbursement with no grace period. There is a credit check involved. If the parents are denied the loan, the student will have an increased limit when they apply for Stafford loans.
Stafford loans are either disbursed by banks or directly by the federal government. There are subsidized loans, meaning the government pays the interest while you are in school. They are based on need. There are also unsubsidized loans in which you are responsible for the interest which accrues. They are not need based. However, you can elect to defer the interest payments until after graduation. Students are not required to repay these loans until six months after they graduate. Loan caps differ depending upon how far along you are in your schooling. Freshmen can borrow up to $3,500, sophomores up to $4,500, and juniors and seniors $5,000. The limits increase if you are an independent student, your parents were denied a PLUS loan, or if you are a graduate student. These loans currently have a fixed interest rate of 6.8 percent, but some lenders may offer rate reductions based upon your career path, such as for teachers or nurses.
A school based loan, offered with funds provided by the government, is called the Perkins Loan. It is need based, subsidized, and currently has a fixed interest rate of 5 percent. Undergraduates are eligible to receive up to $4,000 per year, while graduate students can receive up to $6,000. Your school’s financial aid office determines if you are eligible to receive this type of loan.
A first time borrower can expect his or her loan funds to be delayed by about a month after those of someone who has borrowed before. This means you should apply for your loan as soon as possible. You will also be required to take an entrance interview in order to receive your payments. You will probably be able to take this interview online. Your financial aid office will assist you in completing the interview.
If you know you are going to need loan money to cover college expenses, check with your school’s financial aid office. Some schools do not accept Stafford loans, so you would need to make other arrangements for a loan or find a school that will accept one. Private loans from banks are an option, but be aware that most of the time you will be required to repay them without a grace period. There are some, such as one offered through U-promise, that can be deferred until after graduation. Also, since they are based upon credit scores, many students may not qualify due to a lack of credit history.
Don’t wait until the last minute. Get your FAFSA filled out, and explore all of your options regarding paying for college. This will ensure a smooth transition and better prepare you for any setbacks that may come along.
Student Loans – A Simple Guide
There are various resources to find money for a college education. Student scholarships, student loans, and grants are available to get a college education. After going through the merits and demerits, the best option may be chosen.
Student loans are different from a student scholarship since they have to be repaid. Student loan schemes are available in two different types. One is a subsidized loan and another is an unsubsidized loan. The interest for the subsidized loan is taken care of by the Federal Government in USA and in other countries the finance ministry provides some sort of assistance, whereas the unsubsidized loans carry a normal percentage of interest. Eligibility for a subsidized loan can be found out by filling in the relevant details online
The students and the parents can become tense at the time of planning how the expenses of a college education will be met.
To finance a college education, a programme called FFELP (Federal family education loan programme) provides the most flexible and affordable student loan options. Using the loan finder web service a student can find all the required information for applying for a federal loan online. Find more info at www.loanresourceonline.info
Additional finances not covered by the federal programme such as education related expenses, overseas study, and housing can be procured through a private student educational loan. When compared to credit cards, these programmes carry a marginally lower interest rate and have very easy payback terms.
Many of the student loan agencies - both government and private - have online submission and processing facilities hence the loans are accepted after a review within a week or sooner. The repayment of the Federal student loan can start six months after the graduation of the applicant.
Student loans can be used not only to pay the fees but also for lab fees, dues for associations and housing. A student can still avail an educational loan even though the tuition is covered by a grant.
A student who is eighteen years or above in age, can apply for a student loan. Most of the student loan is deferred for repayment until the student completes the education or leaves the school.
Private loans for students are not given without a co-signer or a credit report. Credit unions give student loans if a vehicle or a boat is provided as collateral.
During the cumulative credit period, a student has the option of paying or not paying the interest part of the loan. It will become easier if periodical payment is made to cover the interest. If this is done, the capital repayment after completing the studies becomes easier for a student.
Student loans are to be repaid in ten years. Nevertheless, longer repayment facilities are provided to large student educational loans.
Student loans are different from a student scholarship since they have to be repaid. Student loan schemes are available in two different types. One is a subsidized loan and another is an unsubsidized loan. The interest for the subsidized loan is taken care of by the Federal Government in USA and in other countries the finance ministry provides some sort of assistance, whereas the unsubsidized loans carry a normal percentage of interest. Eligibility for a subsidized loan can be found out by filling in the relevant details online
The students and the parents can become tense at the time of planning how the expenses of a college education will be met.
To finance a college education, a programme called FFELP (Federal family education loan programme) provides the most flexible and affordable student loan options. Using the loan finder web service a student can find all the required information for applying for a federal loan online. Find more info at www.loanresourceonline.info
Additional finances not covered by the federal programme such as education related expenses, overseas study, and housing can be procured through a private student educational loan. When compared to credit cards, these programmes carry a marginally lower interest rate and have very easy payback terms.
Many of the student loan agencies - both government and private - have online submission and processing facilities hence the loans are accepted after a review within a week or sooner. The repayment of the Federal student loan can start six months after the graduation of the applicant.
Student loans can be used not only to pay the fees but also for lab fees, dues for associations and housing. A student can still avail an educational loan even though the tuition is covered by a grant.
A student who is eighteen years or above in age, can apply for a student loan. Most of the student loan is deferred for repayment until the student completes the education or leaves the school.
Private loans for students are not given without a co-signer or a credit report. Credit unions give student loans if a vehicle or a boat is provided as collateral.
During the cumulative credit period, a student has the option of paying or not paying the interest part of the loan. It will become easier if periodical payment is made to cover the interest. If this is done, the capital repayment after completing the studies becomes easier for a student.
Student loans are to be repaid in ten years. Nevertheless, longer repayment facilities are provided to large student educational loans.
Consolidate Private Student Loans - 4 Benefits You Can't Ignore
Consolidate private student loans into one manageable loan. Instead of trying to juggle multiple private student loans, why not lump them together and make it easier to manage each month? When you consolidate your private student loans, you replace all of your outstanding private loans with one large private student loan. Sounds like a lot of work? Not really. In fact it's easy and here are the benefits that you'll enjoy.
The key benefit when you consolidate private student loans is lower monthly payments. Instead of making multiple monthly payments on different loans, you would have only one monthly payment. That one monthly payment will be less than the total amount of payments of all the other loans combined. Frankly, this is the time when you need your money the most - for rent, furniture, buying a house or car, getting married, starting a family...
By lumping your private student loans into one loan, you make repayment much more convenient. You get to deal with only one lender and that reduces the risk of forgetting about or missing payments. There's much less paperwork to worry about and you don't have to juggle a bunch of different due dates.
Consolidating your private student loans provides you the opportunity to get a lower interest rate and that saves you money. Lower interest charges help to offset the cost of lowering your monthly payment. So in the end, you can have lower monthly payments without extending your loan as far as you would have.
One of the added benefits of consolidating your private student loans is you can improve your credit score. When you receive a consolidation loan, the funds are used to pay off all of the loans being consolidated. So, in effect, you have just successfully paid off multiple loans - on time or early. And that goes a long way to improving your credit score.
So how exactly does that benefit you? Remember, the house or car you want to buy? That's going to take a mortgage or car loan. A better credit score means you pay less interest and that saves you money. In the case of a mortgage, it can mean thousands or even tens of thousands of dollars in savings.
If you want to lower your monthly payments, make them more convenient by dealing with only one loan and get a lower interest rate, you should consolidate private student loans. It not only helps keep your money at a time when you need it but it helps you improve your chances of saving more money on future loans.
The key benefit when you consolidate private student loans is lower monthly payments. Instead of making multiple monthly payments on different loans, you would have only one monthly payment. That one monthly payment will be less than the total amount of payments of all the other loans combined. Frankly, this is the time when you need your money the most - for rent, furniture, buying a house or car, getting married, starting a family...
By lumping your private student loans into one loan, you make repayment much more convenient. You get to deal with only one lender and that reduces the risk of forgetting about or missing payments. There's much less paperwork to worry about and you don't have to juggle a bunch of different due dates.
Consolidating your private student loans provides you the opportunity to get a lower interest rate and that saves you money. Lower interest charges help to offset the cost of lowering your monthly payment. So in the end, you can have lower monthly payments without extending your loan as far as you would have.
One of the added benefits of consolidating your private student loans is you can improve your credit score. When you receive a consolidation loan, the funds are used to pay off all of the loans being consolidated. So, in effect, you have just successfully paid off multiple loans - on time or early. And that goes a long way to improving your credit score.
So how exactly does that benefit you? Remember, the house or car you want to buy? That's going to take a mortgage or car loan. A better credit score means you pay less interest and that saves you money. In the case of a mortgage, it can mean thousands or even tens of thousands of dollars in savings.
If you want to lower your monthly payments, make them more convenient by dealing with only one loan and get a lower interest rate, you should consolidate private student loans. It not only helps keep your money at a time when you need it but it helps you improve your chances of saving more money on future loans.
Lead A Debt Free Student Life, Obtain Debt Consolidation Loans
A prompt and timely repayment always keeps you away from falling into a debt trap. But at the time of financial crisis it becomes quite difficult to make all repayments viable especially if you have taken several debts. To overcome this situation a debt consolidation loan would be the best answer for you.
Too many debts always create a problem with your repayments. Debt consolidation loans help you to repay all your existing debts by consolidating them into one. To be more clear, consider this example. Suppose if you have 3 existing debts. Now when you take a debt consolidation loan, you will make repayment for only this loan. All your previous debts will be merged together and will be repaid automatically by the debt consolidation lender. This will help reduce the size of your repayment and you will be bound with only one creditor.
Student debt consolidation loans also offer several benefits. They come with a very low rate of interest and are charged only after you have completed your school and college. There are plenty of rebates also available that you can avail with student debt consolidation loans, Apart from that if you go for this loan, your debt pressure will decrease a lot and you will be able to concentrate on your studies and work.
You will get a student debt consolidation loan mainly from two sources:
• A government agency- These are federal loans offered usually with cheaper interest rate than other sources.
• A federal agency- also known as private student debt consolidation, offer loan to all students who fail to get a government fund.
Student debt consolidation loans are offered to all types of students. As a student, this might be your first loan that you need to repay your tuition fee, boarding fee, travel expense etc. So, you will be offered with a no credit history loan. You will get a student debt consolidation loan also if you have a bad credit history.
The process of student debt consolidation application is as simple as filling any other form. The most ideal and affordable source of application is the internet to which every student is familiar. Internet provides a range of lenders offering student debt consolidation loans. The application form will ask you for certain details about your identity and credit history. Being a student your loan application will be approved quickly without any delay.
But before filling out any form, first research and find the lender offering best loan amount with the lowest interest rates and easy repayments. This way you will get the best deal that will make your financial status good.
Too many debts always create a problem with your repayments. Debt consolidation loans help you to repay all your existing debts by consolidating them into one. To be more clear, consider this example. Suppose if you have 3 existing debts. Now when you take a debt consolidation loan, you will make repayment for only this loan. All your previous debts will be merged together and will be repaid automatically by the debt consolidation lender. This will help reduce the size of your repayment and you will be bound with only one creditor.
Student debt consolidation loans also offer several benefits. They come with a very low rate of interest and are charged only after you have completed your school and college. There are plenty of rebates also available that you can avail with student debt consolidation loans, Apart from that if you go for this loan, your debt pressure will decrease a lot and you will be able to concentrate on your studies and work.
You will get a student debt consolidation loan mainly from two sources:
• A government agency- These are federal loans offered usually with cheaper interest rate than other sources.
• A federal agency- also known as private student debt consolidation, offer loan to all students who fail to get a government fund.
Student debt consolidation loans are offered to all types of students. As a student, this might be your first loan that you need to repay your tuition fee, boarding fee, travel expense etc. So, you will be offered with a no credit history loan. You will get a student debt consolidation loan also if you have a bad credit history.
The process of student debt consolidation application is as simple as filling any other form. The most ideal and affordable source of application is the internet to which every student is familiar. Internet provides a range of lenders offering student debt consolidation loans. The application form will ask you for certain details about your identity and credit history. Being a student your loan application will be approved quickly without any delay.
But before filling out any form, first research and find the lender offering best loan amount with the lowest interest rates and easy repayments. This way you will get the best deal that will make your financial status good.
Repayment to Begin on Student Loans; NextStudent offers Options
For many recent college graduates the repayment period on their student loans is about to begin due to the end of the six-month grace period. As many graduates find their student loan payment booklets in their mailboxes, which typically arrive approximately 30 to 60 days before the first due date for payment, it is important for graduates to make their payments on time. Some graduates may be in a position to make the scheduled “level repayment,” while others will find themselves in a burdensome financial situation.
Phoenix-based NextStudent, the premier education funding company offers free advice and a variety of repayment options for students. Repaying student loans (http://www.nextstudent.com/student-loans/student-loans.asp) is serious business. However, there are various options depending on a graduate’s situation, most repayments are set to “level repayment,” unless otherwise noted.
Not every college graduate is settled into life after college, and not every graduate is employed. Some graduates still are searching for a job while others have moved home to save money. Life immediately after college can be a little stressful. There are so many things to get in order along with a new job, such as a place to live and a vehicle to get you where you need to go.
By contacting NextStudent after receipt of their payment booklet, graduates can speak to Education Finance Advisers and receive free guidance about the other available repayment plans. Income-sensitive and extended repayment plans are available by directly contacting the lender. With graduated repayment plans, graduates agree initially to pay lower payments. However, the payment amount increases every two years. This is a good choice for those graduates who feel or know that their salary will increase over time.
Forbearance is an option that graduates can use for any given reason. Graduates can use forbearance for up to three years. However, it is important to note that interest continues to accrue throughout the forbearance period.
There are those graduates who opt to defer their student loan payments. With deferment, student loan payments are postponed for a maximum of three years. While in deferment, interest will not accrue on subsidized loans. Graduates must show economic hardship to be eligible.
There are many available options for student loan repayment. NextStudent knows that when a grace period ends, it not always is the best time for graduates to repay their student loans. The Education Finance Advisers are there to help students and graduates with all the questions they may have regarding repayment and the options available to help make life easier and more manageable including student loan consolidation (http://www.nextstudent.com).
About NextStudent
NextStudent, http://www.nextstudent.com/, federal lender code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation (http://www.nextstudent.com) programs, and college savings plans.
The NextStudent Scholarship Search Engine, one of the nation’s oldest and largest scholarship search engines, is updated daily, available free of charge, completely private – and represents 2.4 million scholarships worth $3.4 billion.
Phoenix-based NextStudent, the premier education funding company offers free advice and a variety of repayment options for students. Repaying student loans (http://www.nextstudent.com/student-loans/student-loans.asp) is serious business. However, there are various options depending on a graduate’s situation, most repayments are set to “level repayment,” unless otherwise noted.
Not every college graduate is settled into life after college, and not every graduate is employed. Some graduates still are searching for a job while others have moved home to save money. Life immediately after college can be a little stressful. There are so many things to get in order along with a new job, such as a place to live and a vehicle to get you where you need to go.
By contacting NextStudent after receipt of their payment booklet, graduates can speak to Education Finance Advisers and receive free guidance about the other available repayment plans. Income-sensitive and extended repayment plans are available by directly contacting the lender. With graduated repayment plans, graduates agree initially to pay lower payments. However, the payment amount increases every two years. This is a good choice for those graduates who feel or know that their salary will increase over time.
Forbearance is an option that graduates can use for any given reason. Graduates can use forbearance for up to three years. However, it is important to note that interest continues to accrue throughout the forbearance period.
There are those graduates who opt to defer their student loan payments. With deferment, student loan payments are postponed for a maximum of three years. While in deferment, interest will not accrue on subsidized loans. Graduates must show economic hardship to be eligible.
There are many available options for student loan repayment. NextStudent knows that when a grace period ends, it not always is the best time for graduates to repay their student loans. The Education Finance Advisers are there to help students and graduates with all the questions they may have regarding repayment and the options available to help make life easier and more manageable including student loan consolidation (http://www.nextstudent.com).
About NextStudent
NextStudent, http://www.nextstudent.com/, federal lender code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation (http://www.nextstudent.com) programs, and college savings plans.
The NextStudent Scholarship Search Engine, one of the nation’s oldest and largest scholarship search engines, is updated daily, available free of charge, completely private – and represents 2.4 million scholarships worth $3.4 billion.
Loans For Every Occasion: Home Loans, Payday Loans, Student Loans And More...
At some point in life, it is almost guaranteed that you will be applying for a loan of some sort. Paying cash for products and services is not only becoming obsolete, it's terribly inconvenient. Today, credit is a way of life, and as more and more people begin to shop online, plastic is the currency accepted everywhere.
The most basic of loans is of course, the credit card. Companies that issue credit cards make money every month that you carry a balance, and they are betting on the fact that you won't pay off the balance every month.
Some loans actually make good business sense. Why would anyone want to shell out $300,000 for a new home when they could get a Home Loan and pay $1,000.00 a month, and then deduct the interest paid from their income taxes? That three hundred grand could be put to work in other investments, and could conceivably earn more for you than you are actually paying for the house! And all that time, if you time it right, your house becomes more and more valuable.
There are also times when for many people things just aren’t going well financially. An unexpected expense occurs and you find yourself just coming up short on your living expenses. Many types of loans exist for this type of situation, both secured and unsecured.
Maybe you just need some quick cash to get through the holidays, and intend to pay the loan off within the next few pay periods. Companies offering short term Payday Loans abound both on the Internet and off. Some with no credit check will transfer up to $1,500 into your bank account within 24 hours.
Student loans, auto loans, small business loans, personal loans, home loans, second mortgages, payday loans, government loans, bad credit loans, loans to consolidate other loans – there is a loan for just about any occasion out there.
The question is how much are you going to pay for your loan? And the answer to that depends in most cases on your credit history.
Your Credit History: Weather or not you get the loan, and how much it will cost you.
It is never too early to start establishing credit, and the best way to do this is with a credit card. If you are finding it difficult to obtain a credit card because you have no history, you can always buy your history by applying for a secured credit card or line of credit. Put down $500 or $1,000 and borrow against it. Make sure the institution you are applying to reports to the major credit bureaus, use the line of credit and pay your bills on time, and voila – you have a credit history! There is nothing wrong with carrying a balance over, just pay the minimum or a bit more, and pay it on time! Creditors like to think they will be making some money off of you.
What Lenders are Looking For
While different institutions have different criteria, there are some generalizations one can make about how they determine the creditworthiness of an applicant. Make no mistake about it; creditors are in the business of making money. If your credit is less than perfect, it doesn’t necessarily mean you won’t get the loan, but you will be paying more for it!
After receiving your application, a lender will then acquire a credit report from one of the three major credit bureaus, Equifax, Trans Union, or Experian. This is your credit history. Taking into account such factors as your income, the balances in your checking and savings accounts, the assets you own, the length of time you have been at your current job and place of residence, the amount you owe other creditors, and how promptly you pay your bills, the potential lender will then make a determination on if you will get the loan, and how much they will charge you for it.
Frequent late payments, bankruptcy, repossessions, legal judgment liens, or accounts being turned over to collection agencies do not bode well for obtaining a loan. That being said, most creditors realize that life happens, and such legitimate circumstances like an unexpected illness, injury, or the loss of your job do not necessarily reflect negatively on your creditworthiness.
When Things Take a Turn for the Worse
If you are in the process of paying on a loan or loans and one of these unforeseen circumstances befall you, talk to your loan officer. Most loan institutions find it in their best interest to work with the lendee, and will often make the necessary arrangements to make it easier for you to make your payments. Just remember, they want their money, and the last thing they want is for you to default on your loan, or heaven forbid, declare bankruptcy!
The most basic of loans is of course, the credit card. Companies that issue credit cards make money every month that you carry a balance, and they are betting on the fact that you won't pay off the balance every month.
Some loans actually make good business sense. Why would anyone want to shell out $300,000 for a new home when they could get a Home Loan and pay $1,000.00 a month, and then deduct the interest paid from their income taxes? That three hundred grand could be put to work in other investments, and could conceivably earn more for you than you are actually paying for the house! And all that time, if you time it right, your house becomes more and more valuable.
There are also times when for many people things just aren’t going well financially. An unexpected expense occurs and you find yourself just coming up short on your living expenses. Many types of loans exist for this type of situation, both secured and unsecured.
Maybe you just need some quick cash to get through the holidays, and intend to pay the loan off within the next few pay periods. Companies offering short term Payday Loans abound both on the Internet and off. Some with no credit check will transfer up to $1,500 into your bank account within 24 hours.
Student loans, auto loans, small business loans, personal loans, home loans, second mortgages, payday loans, government loans, bad credit loans, loans to consolidate other loans – there is a loan for just about any occasion out there.
The question is how much are you going to pay for your loan? And the answer to that depends in most cases on your credit history.
Your Credit History: Weather or not you get the loan, and how much it will cost you.
It is never too early to start establishing credit, and the best way to do this is with a credit card. If you are finding it difficult to obtain a credit card because you have no history, you can always buy your history by applying for a secured credit card or line of credit. Put down $500 or $1,000 and borrow against it. Make sure the institution you are applying to reports to the major credit bureaus, use the line of credit and pay your bills on time, and voila – you have a credit history! There is nothing wrong with carrying a balance over, just pay the minimum or a bit more, and pay it on time! Creditors like to think they will be making some money off of you.
What Lenders are Looking For
While different institutions have different criteria, there are some generalizations one can make about how they determine the creditworthiness of an applicant. Make no mistake about it; creditors are in the business of making money. If your credit is less than perfect, it doesn’t necessarily mean you won’t get the loan, but you will be paying more for it!
After receiving your application, a lender will then acquire a credit report from one of the three major credit bureaus, Equifax, Trans Union, or Experian. This is your credit history. Taking into account such factors as your income, the balances in your checking and savings accounts, the assets you own, the length of time you have been at your current job and place of residence, the amount you owe other creditors, and how promptly you pay your bills, the potential lender will then make a determination on if you will get the loan, and how much they will charge you for it.
Frequent late payments, bankruptcy, repossessions, legal judgment liens, or accounts being turned over to collection agencies do not bode well for obtaining a loan. That being said, most creditors realize that life happens, and such legitimate circumstances like an unexpected illness, injury, or the loss of your job do not necessarily reflect negatively on your creditworthiness.
When Things Take a Turn for the Worse
If you are in the process of paying on a loan or loans and one of these unforeseen circumstances befall you, talk to your loan officer. Most loan institutions find it in their best interest to work with the lendee, and will often make the necessary arrangements to make it easier for you to make your payments. Just remember, they want their money, and the last thing they want is for you to default on your loan, or heaven forbid, declare bankruptcy!
NextStudent Offers PLUS Loans for Graduate and Professional Students
According to Phoenix-based NextStudent, a premier education funding company, the proliferation of graduate and professional programs has led to new sources of education funding designed to benefit these goal-orientated students who are, in essence, beginning their career by continuing on in their education. As the job market in the United States continues to generate a need for applicants who are highly competitive in specified fields from technology to the ever-growing medical field, undergraduate students across the country are beginning to feel the squeeze as graduate and professional degrees become “must-haves” for even intermediate and entry-level positions.
The decision to continue education onto the graduate and professional level is one that oftentimes comes with considerable financial stress because of the continued financial obligation. However, NextStudent’s Graduate PLUS Loan (http://www.nextstudent.com/) Program may allow borrowers to fund up to the full cost of their education (less any financial aid received), including living expenses, books, supplies and even computers.
NextStudent now offers a PLUS Loan Program for graduate and professional students with rates starting as low as 8.5 percent. The Graduate PLUS Loan Program features the same benefits directly to graduate and professional students that parents of undergraduate students receive from traditional PLUS loans (http://www.nextstudent.com/plus_loans/plus_loans.asp). Because NextStudent Graduate PLUS loans are federally sponsored, they offer many of the perks of traditional PLUS loans, including eligibility for federal student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp), tax-deductible interest and a variety of repayment options.
Eligibility and Credit Resolution
NextStudent offers a simple online application process through E-Signature, and many prospects who apply online qualify within minutes. Also offered is a “second look” for borrowers who receive an initial denial because of unresolved credit issues. NextStudent has a PLUS Credit Resolution Team that has an 87 percent success rate at resolving borrowers’ credit issues, resulting in funded PLUS loans.
Graduate PLUS loans (http://www.nextstudent.com/plus_loans/plus_loans.asp) easily are accessible to many students. To qualify a student must be a U.S. citizen or an eligible noncitizen. Although a credit check is required, many students with limited or no credit history still qualify for Graduate PLUS loans.
Flexible Repayment Options and Aggressive Incentives
With all the great incentives offered by NextStudent and its Graduate PLUS Loan Program, now is the right time for students to take the next step and go for their graduate degree.
NextStudent Graduate PLUS loans offer several repayment options including deferred repayment while a student is enrolled in school at least half time, and there are no prepayment penalties, ever. There also is a 3 percent cash rebate at repayment on the remaining principal balance after the first 12 months of consecutive on-time payments when student borrowers pay through Auto-Debit. In addition, a 2 percent interest rate reduction is available after the first 48 months of consecutive on-time payments when student borrowers pay through Auto-Debit. Student borrowers receive a .25 percent reduction when they choose repayment through Auto-Debit.
NextStudent, federal lender code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp) programs, and college savings plans.
The NextStudent Scholarship Search Engine, one of the nation’s oldest and largest scholarship search engines, is updated daily, available free of charge, completely private – and represents 2.4 million scholarships worth $3.4 billion.
The decision to continue education onto the graduate and professional level is one that oftentimes comes with considerable financial stress because of the continued financial obligation. However, NextStudent’s Graduate PLUS Loan (http://www.nextstudent.com/) Program may allow borrowers to fund up to the full cost of their education (less any financial aid received), including living expenses, books, supplies and even computers.
NextStudent now offers a PLUS Loan Program for graduate and professional students with rates starting as low as 8.5 percent. The Graduate PLUS Loan Program features the same benefits directly to graduate and professional students that parents of undergraduate students receive from traditional PLUS loans (http://www.nextstudent.com/plus_loans/plus_loans.asp). Because NextStudent Graduate PLUS loans are federally sponsored, they offer many of the perks of traditional PLUS loans, including eligibility for federal student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp), tax-deductible interest and a variety of repayment options.
Eligibility and Credit Resolution
NextStudent offers a simple online application process through E-Signature, and many prospects who apply online qualify within minutes. Also offered is a “second look” for borrowers who receive an initial denial because of unresolved credit issues. NextStudent has a PLUS Credit Resolution Team that has an 87 percent success rate at resolving borrowers’ credit issues, resulting in funded PLUS loans.
Graduate PLUS loans (http://www.nextstudent.com/plus_loans/plus_loans.asp) easily are accessible to many students. To qualify a student must be a U.S. citizen or an eligible noncitizen. Although a credit check is required, many students with limited or no credit history still qualify for Graduate PLUS loans.
Flexible Repayment Options and Aggressive Incentives
With all the great incentives offered by NextStudent and its Graduate PLUS Loan Program, now is the right time for students to take the next step and go for their graduate degree.
NextStudent Graduate PLUS loans offer several repayment options including deferred repayment while a student is enrolled in school at least half time, and there are no prepayment penalties, ever. There also is a 3 percent cash rebate at repayment on the remaining principal balance after the first 12 months of consecutive on-time payments when student borrowers pay through Auto-Debit. In addition, a 2 percent interest rate reduction is available after the first 48 months of consecutive on-time payments when student borrowers pay through Auto-Debit. Student borrowers receive a .25 percent reduction when they choose repayment through Auto-Debit.
NextStudent, federal lender code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp) programs, and college savings plans.
The NextStudent Scholarship Search Engine, one of the nation’s oldest and largest scholarship search engines, is updated daily, available free of charge, completely private – and represents 2.4 million scholarships worth $3.4 billion.
Plan a Bright Future ahead with International Student Loans
Education is described as a liberating force and is mandatory for all. But, escalating cost of education is creating hindrance in the way of success for many of the students. Many of the students have opted employment as a means to cope with this shortcoming. But, even this is not possible for all. At such crucial point of time, international student loans can be put to use. These loans are easy to apply for and quick to avail. But, you need to be completely aware of every minute detail of international student loans before taking up one. Here, you can find every inch fact about international student loans, so that you can make most of these loans and reach new heights in your career.
The international student loans are most easy to avail due to bendable terms attached to it. The lenders have a softer attitude towards students for they do not have any source of employment to rely upon. This is one of the reasons why the international student loans are offered at nominal rates of interest. There is absolutely no processing fee attached to it.
The credit history of the co- signer does play a crucial role and can fetch you ostensible deals, as well. The loan amount is transferred directly to the college or school. International student loans cover up a wide array of your expenses like tuition fees, living expenses, hostel fees, computer expense, books and many more.
Your responsibility is to ascertain your need in advance and borrow up to that limit only. For the repayment of the loan amount of international student loans, you will be granted enough time. It is after you have completed your studies and taken up some employment. The most likeable feature of international student loans is that it is not limited to any place. Students from abroad can also avail the benefits of international student loans. With online processing, the entire procedure is much more accessible to all.
The international student loans are most easy to avail due to bendable terms attached to it. The lenders have a softer attitude towards students for they do not have any source of employment to rely upon. This is one of the reasons why the international student loans are offered at nominal rates of interest. There is absolutely no processing fee attached to it.
The credit history of the co- signer does play a crucial role and can fetch you ostensible deals, as well. The loan amount is transferred directly to the college or school. International student loans cover up a wide array of your expenses like tuition fees, living expenses, hostel fees, computer expense, books and many more.
Your responsibility is to ascertain your need in advance and borrow up to that limit only. For the repayment of the loan amount of international student loans, you will be granted enough time. It is after you have completed your studies and taken up some employment. The most likeable feature of international student loans is that it is not limited to any place. Students from abroad can also avail the benefits of international student loans. With online processing, the entire procedure is much more accessible to all.
What Happens When You Default on your Student Loans?
I ignored (didn't pay) my student loan for years - many years. This was back in the old days (20 years ago) before the government was so efficient at collecting their (your) money. Nothing much happened.
OK, so one day years later, they found my bank account and froze it. Cost me a few hundred dollars. I'll survive.
And then, they started taking my income tax return money. Damn! That hurt. But Life goes on... Life is good, All is well!
But then one day, years later. Big Brother (your Uncle Sam) Returns!
I had learned not to keep too much money in the bank (didn't have much anyway).
And I learned not to expect any money back from income taxes. I was OK with that.
But I was totally unprepared for what Big Brother did next. He blind sided me…
One day I go to cash my paycheck, and I noticed "Hey, my check is mighty small this week" What happened?
I look closely at my pay stub. The number of hours are correct... the rate is correct. Hey, what's this…
Wage Attachment. 10% of the gross. 10% OF THE GROSS, not net.
10% of the freakin' gross! Damn!
10% of the gross taken off the top. Before you get your check.
10% of the gross gone… Every Week…
No explanation, no one to complain to. No supervisor to override. Your money is gone.
10% GONE. It doesn't matter that you were barely scrapping by in life every week, living paycheck to check.
Now you live with 10% less. Every week. It sucks!
PLUS, they still take your income tax refund. No wonder they call it a re fund becaues they are Re Funding their own pockets with your money.
There's nothing you can do about it. So I learned to live on 10% less for many years.
One day I finally had the good fortune to get a better paying job. Better job, better pay and…
Best of all - the wage attachment stopped. Hurray!
Or so I thought… Life is good. Life goes on. I pay my bills.
Years later, on Friday the 13th, it happened. "Big Brother Returned Again".
One miserable deja vu day the check was small. I check the paystub. Number of hours are correct... the rate is correct…
There it was on the pay stub again… Wage attachment. 10% of the gross.
‘Son of a bitch' found me again. Damn it, damn it, damn it!
You can't win! You can't hide!
Big Brother will find you. It might take weeks. It might take months. In my case it took many, many years… Decades!
But Big Brother will hunt you down and find you. You can't hide forever! And guess what?
Big Brother has Increased the wage attachment withholdings to 15% of the gross.
How much does that hurt?
As an example, let's say you were grossing $1,000 per week. You would pay about $350 in taxes leaving you with $650.
They will take 15% of the $1,000 which is $150 leaving you with only $500.
HALF of your paycheck is GONE!
You just took a $150 a week pay cut. And if you make less than $1,000 it hurts even more.
AND they still take your income tax return!
Trust me on this. You DON'T want this to happen to YOU! Pay your student loans on time.
OK, so one day years later, they found my bank account and froze it. Cost me a few hundred dollars. I'll survive.
And then, they started taking my income tax return money. Damn! That hurt. But Life goes on... Life is good, All is well!
But then one day, years later. Big Brother (your Uncle Sam) Returns!
I had learned not to keep too much money in the bank (didn't have much anyway).
And I learned not to expect any money back from income taxes. I was OK with that.
But I was totally unprepared for what Big Brother did next. He blind sided me…
One day I go to cash my paycheck, and I noticed "Hey, my check is mighty small this week" What happened?
I look closely at my pay stub. The number of hours are correct... the rate is correct. Hey, what's this…
Wage Attachment. 10% of the gross. 10% OF THE GROSS, not net.
10% of the freakin' gross! Damn!
10% of the gross taken off the top. Before you get your check.
10% of the gross gone… Every Week…
No explanation, no one to complain to. No supervisor to override. Your money is gone.
10% GONE. It doesn't matter that you were barely scrapping by in life every week, living paycheck to check.
Now you live with 10% less. Every week. It sucks!
PLUS, they still take your income tax refund. No wonder they call it a re fund becaues they are Re Funding their own pockets with your money.
There's nothing you can do about it. So I learned to live on 10% less for many years.
One day I finally had the good fortune to get a better paying job. Better job, better pay and…
Best of all - the wage attachment stopped. Hurray!
Or so I thought… Life is good. Life goes on. I pay my bills.
Years later, on Friday the 13th, it happened. "Big Brother Returned Again".
One miserable deja vu day the check was small. I check the paystub. Number of hours are correct... the rate is correct…
There it was on the pay stub again… Wage attachment. 10% of the gross.
‘Son of a bitch' found me again. Damn it, damn it, damn it!
You can't win! You can't hide!
Big Brother will find you. It might take weeks. It might take months. In my case it took many, many years… Decades!
But Big Brother will hunt you down and find you. You can't hide forever! And guess what?
Big Brother has Increased the wage attachment withholdings to 15% of the gross.
How much does that hurt?
As an example, let's say you were grossing $1,000 per week. You would pay about $350 in taxes leaving you with $650.
They will take 15% of the $1,000 which is $150 leaving you with only $500.
HALF of your paycheck is GONE!
You just took a $150 a week pay cut. And if you make less than $1,000 it hurts even more.
AND they still take your income tax return!
Trust me on this. You DON'T want this to happen to YOU! Pay your student loans on time.
Refinance Your Student Loans
If you’ve recently graduated from college, you’ve probably been bombarded with mailings and advertisements urging you to refinance (or consolidate) your student loans right away. But wait, what is loan consolidation? And why should you do it?
If you’ve just graduated from college, you’ve probably got a number of different student loans, all in different amounts from different lenders at different interest rates. Loan consolidators (which can be private banks, lenders or government agencies) pay off all your individual loans in exchange for a single loan in the same amount issued to you. So now instead of all those different loans, you’ve got one loan that you repay to the consolidator.
Refinancing your student loans reduces your monthly payments and locks in a fixed interest rate. In most cases, student loans have variable interest rates set a few points below prime. As interest rates go up, so will the interest rate on your loans. When you refinance your loans, you lock in an interest rate based on the current market conditions that will be set for the life of your loan. Therefore, it’s important to evaluate the market before making the decision to consolidate. Right now, interest rates are low, but they’re going up and most economists predict that they’ll continue to go up for awhile. So for many people, this is a good time to refinance.
Your credit history will also determine your eligibility for loan consolidation programs. Loan consolidators can be picky in who they accept for their programs, so the option to refinance is usually only available to individuals who have established good credit by paying their loans back on time. If you’ve missed payments or made payments consistently late, you may not be offered the best terms, if you’re accepted at all. If your application is denied the first time, call the consolidator and talk to a loan officer about the reason for your rejection. The officer may offer you advice on how to qualify for their program at a later date.
If you decide to refinance, be sure to consolidate federal loans and private loans separately from each other. When you consolidate your loans, you’re typically offered a rate that’s 1-2% lower than the average rate of your loans. Federal student loans often carry much lower interest rates than private loans, so consolidating them together can bring up the average interest rate of your loans and leave you with a higher fixed rate locked in. If you only have one private loan, it may not make a difference, but it’s important to assess your options before committing to refinance.
Is there anyone who shouldn’t consolidate? Let’s look at a scenario. Tracy has 2 loans for $5,000 each that are scheduled to be paid off within 5 years. She can afford to make her monthly payments but wants to see if she can save a little extra cash each month by consolidating. She finds out that she can refinance the loans into a $10,000 consolidation loan to lower her monthly payments and she’ll be eligible to extend her payments over 8 years. But because she’s extended the life of her loans, she’ll be paying interest over a longer period of time and may wind up paying more overall than if she had kept her loans as they were.
It is tempting to pay less per month but if you can afford to pay off your loans in a shorter period of time, then you’ll likely save money on interest in the long run. Obviously every situation is different and you won’t find all your answers in a short article like this. But if you think loan consolidation might be right for you, check out the Student Loan Network’s site at Studentloanconsolidator.com for more information or speak with a loan officer or financial planner to see what your options are.
If you’ve just graduated from college, you’ve probably got a number of different student loans, all in different amounts from different lenders at different interest rates. Loan consolidators (which can be private banks, lenders or government agencies) pay off all your individual loans in exchange for a single loan in the same amount issued to you. So now instead of all those different loans, you’ve got one loan that you repay to the consolidator.
Refinancing your student loans reduces your monthly payments and locks in a fixed interest rate. In most cases, student loans have variable interest rates set a few points below prime. As interest rates go up, so will the interest rate on your loans. When you refinance your loans, you lock in an interest rate based on the current market conditions that will be set for the life of your loan. Therefore, it’s important to evaluate the market before making the decision to consolidate. Right now, interest rates are low, but they’re going up and most economists predict that they’ll continue to go up for awhile. So for many people, this is a good time to refinance.
Your credit history will also determine your eligibility for loan consolidation programs. Loan consolidators can be picky in who they accept for their programs, so the option to refinance is usually only available to individuals who have established good credit by paying their loans back on time. If you’ve missed payments or made payments consistently late, you may not be offered the best terms, if you’re accepted at all. If your application is denied the first time, call the consolidator and talk to a loan officer about the reason for your rejection. The officer may offer you advice on how to qualify for their program at a later date.
If you decide to refinance, be sure to consolidate federal loans and private loans separately from each other. When you consolidate your loans, you’re typically offered a rate that’s 1-2% lower than the average rate of your loans. Federal student loans often carry much lower interest rates than private loans, so consolidating them together can bring up the average interest rate of your loans and leave you with a higher fixed rate locked in. If you only have one private loan, it may not make a difference, but it’s important to assess your options before committing to refinance.
Is there anyone who shouldn’t consolidate? Let’s look at a scenario. Tracy has 2 loans for $5,000 each that are scheduled to be paid off within 5 years. She can afford to make her monthly payments but wants to see if she can save a little extra cash each month by consolidating. She finds out that she can refinance the loans into a $10,000 consolidation loan to lower her monthly payments and she’ll be eligible to extend her payments over 8 years. But because she’s extended the life of her loans, she’ll be paying interest over a longer period of time and may wind up paying more overall than if she had kept her loans as they were.
It is tempting to pay less per month but if you can afford to pay off your loans in a shorter period of time, then you’ll likely save money on interest in the long run. Obviously every situation is different and you won’t find all your answers in a short article like this. But if you think loan consolidation might be right for you, check out the Student Loan Network’s site at Studentloanconsolidator.com for more information or speak with a loan officer or financial planner to see what your options are.
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