Being a student is expensive. Many find that although they have graduated from college, the debt that they piled up while students puts a serious strain on their budget and will be with them for some time. If this is the case, deciding to consolidate your student loans might be a wise option.
Consolidating debt typically has numerous advantages. Instead of making several payments to different loans throughout the month, debt consolidation allows consumers to pay just one payment per month that will cover the entire debt amount. This can be extremely convenient and helpful for budgeting. With a hectic life and job, it is much easier to make one prompt payment as opposed to three or four.
While the rates on many student loans may change over time, one benefit in consolidating your debt is that you may be able to lock into a fixed, low interest rate for the entirety of the loan.
This can be done by transferring your loans to a private company, thus consolidating them and locking in a fixed, low interest rate. Since these companies charge the government money, you will usually not be required to pay a dime. Such loans should be easy to obtain for just about anyone.
By locking into a fixed, lower interest rate you stand to save money. For instance, the amount of money you are required to pay each month should be reduced. If you are currently experiencing economic difficulties, this will help you to establish a reasonable budget. If you are able to pay more than the minimum monthly payment, your student debt will be eliminated even quicker. Suppose you are able to lower your monthly minimum payment from $150 to $125. If you keep paying the same amount each month, $150, the extra $25 will go straight to the loan’s principal. You will thus save considerably on interest and be debt free in much less time.
Some of the other advantages to consolidating your student debt include not only monetary savings, but also the ability to resolve you debt quicker and easier due to a fixed, lower interest rate.
You will also be left with one monthly payment instead of the several you are currently making. Generally, you can also consolidate your student loans without having to pay a dime.
Such consolidation loans are generally available to everyone. If you are currently having trouble making your monthly payments or would just like to be debt free, make the wise choice to consolidate all of your student loans into one, thus locking in an excellent rate.
Sunday, November 23, 2008
Bad Credit: Get Out Of Debt
During the first few years of college, I absolutely ruined my credit. I picked up a few student Visa cards and proceeded to spend money that I didn’t have. I hadn’t learned about credit and what a terrible thing it can be to have bad credit. When I tried to pay for school and other expenses, this made life pretty difficult.
My credit score was terrible - actually under 500. Getting loans was quite difficult. Anyone that wanted to check my credit would deny me. I couldn’t get a cell phone or a satellite dish so it seemed safe to assume that I couldn’t get any type of loan. I didn’t believe that student loans would ever work for me.
School is now over for me and I have started correcting my credit. I actually now have a credit score over 700. Since I’m somewhat interested in going to grad school, I have been looking into student loans. The funny thing is that I now realize that I could have taken out loans all along.
The United States government created Stafford loans to help almost everyone to be able to get an education. Even if your credit is poor, the government will sign for you with the bank. They would definitely come after you if you defaulted on the loan, but the possibility opens up a lot of doors for people with poor credit.
Economically, it makes perfect sense for the government to loan money to students. Even students that have bad credit will increase their lifetime earnings significantly if they graduate from college. The government knows they will get more in taxes if they can get more people to finish school.
Qualifying for Stafford loans is actually quite simple. First, you will need to be a citizen of the United States that is 18 years old. Yes, minors can go to college. However, they can not legally get loans without a cosigner.
If you have a default on a student loan from the past, it will become quite difficult to get Stafford loans. Your only option at that point will be to pay off the defaulted loan. If you’ve never defaulted, chances are you’ll be approved without any problem.
If I had learned about these loan programs earlier, I could have finished school in a much shorter time period. As is, it took a few extra years. I guess you have to live and learn. Hopefully this article will help someone to learn that getting loans is an option now.
About the Author:
Dave helps educate people about guaranteed online personal loans and bad credit student loans.
My credit score was terrible - actually under 500. Getting loans was quite difficult. Anyone that wanted to check my credit would deny me. I couldn’t get a cell phone or a satellite dish so it seemed safe to assume that I couldn’t get any type of loan. I didn’t believe that student loans would ever work for me.
School is now over for me and I have started correcting my credit. I actually now have a credit score over 700. Since I’m somewhat interested in going to grad school, I have been looking into student loans. The funny thing is that I now realize that I could have taken out loans all along.
The United States government created Stafford loans to help almost everyone to be able to get an education. Even if your credit is poor, the government will sign for you with the bank. They would definitely come after you if you defaulted on the loan, but the possibility opens up a lot of doors for people with poor credit.
Economically, it makes perfect sense for the government to loan money to students. Even students that have bad credit will increase their lifetime earnings significantly if they graduate from college. The government knows they will get more in taxes if they can get more people to finish school.
Qualifying for Stafford loans is actually quite simple. First, you will need to be a citizen of the United States that is 18 years old. Yes, minors can go to college. However, they can not legally get loans without a cosigner.
If you have a default on a student loan from the past, it will become quite difficult to get Stafford loans. Your only option at that point will be to pay off the defaulted loan. If you’ve never defaulted, chances are you’ll be approved without any problem.
If I had learned about these loan programs earlier, I could have finished school in a much shorter time period. As is, it took a few extra years. I guess you have to live and learn. Hopefully this article will help someone to learn that getting loans is an option now.
About the Author:
Dave helps educate people about guaranteed online personal loans and bad credit student loans.
Student Loan Help 101
For those of who don’t keep up the happenings in the financial aid world…there have been a few changes recently. The Higher Education Act of 1965 was reauthorized in August of 2008, with some interesting amendments within it…keep reading because these changes could affect you directly.
Tuition Transparency List
The US Dept of Ed is going to release 6 lists annually regarding cost and cost increase in colleges:
1. Top 5% of schools with highest tuition increase in the recent year
2. Top 5% of schools with highest tuition increase in the past 3 years
3. Top 5% of schools with highest net price in the recent year
4. Top 5% of schools with highest net price in the past 3 years
5. Top 10 % of schools with the lowest fees
6. Top 10 % of schools with the lowest net price
The purpose of doing this is to hopefully keep tuition increases from continuing…school’s obviously do not want appear on lists 1-4, and so hopefully will keep costs down, which will benefit future and current students
Changes in Student AID
1. The Pell Grant max will increase by $400 every year until 2014-2015
2. Convicted sex offenders will NOT be eligible to receive financial aid
3. As of July 1, 2009 a student will receive an automatic $0 EFC if a parent or guardian died in Iraq or Afghanistan after Sept. 11, 2001.
4. The work study program was continued through 2014
5. Community Service now can include helping a community recover from a natural disaster
6. If a student is displaced because of a natural disaster, the college can continue to compensate the student for their “work study”, limited to one school year.
7. Federal Perkins Loan was increased to $5000 for undergraduate students and $8000 for graduate students
8. People who have been convicted of a drug charge, can now regain their eligibility if they pass 2 unannounced drug tests (no word yet on how the gov’t plans on executing this piece of the legislation)
Changes in Need Analysis (how your school determines your aid package)
1. military housing is no longer considered an asset
2. veterans benefits are no longer counted as an asset effective July 1, 2010
3. A FAO (financial aid office) now has the ability to use tax returns from 2 years prior to the school year to determine an aid package
4. FAO’s can now award Dependent students whose parents refuse to fill out the FAFSA or does not help financially for college, the full unsubsidized amount (same amount that independent students get)
5. Students from the Federated States of Micronesia and the Marshall Islands now must have a ssn in order to receive aid for a college.
Tuition Transparency List
The US Dept of Ed is going to release 6 lists annually regarding cost and cost increase in colleges:
1. Top 5% of schools with highest tuition increase in the recent year
2. Top 5% of schools with highest tuition increase in the past 3 years
3. Top 5% of schools with highest net price in the recent year
4. Top 5% of schools with highest net price in the past 3 years
5. Top 10 % of schools with the lowest fees
6. Top 10 % of schools with the lowest net price
The purpose of doing this is to hopefully keep tuition increases from continuing…school’s obviously do not want appear on lists 1-4, and so hopefully will keep costs down, which will benefit future and current students
Changes in Student AID
1. The Pell Grant max will increase by $400 every year until 2014-2015
2. Convicted sex offenders will NOT be eligible to receive financial aid
3. As of July 1, 2009 a student will receive an automatic $0 EFC if a parent or guardian died in Iraq or Afghanistan after Sept. 11, 2001.
4. The work study program was continued through 2014
5. Community Service now can include helping a community recover from a natural disaster
6. If a student is displaced because of a natural disaster, the college can continue to compensate the student for their “work study”, limited to one school year.
7. Federal Perkins Loan was increased to $5000 for undergraduate students and $8000 for graduate students
8. People who have been convicted of a drug charge, can now regain their eligibility if they pass 2 unannounced drug tests (no word yet on how the gov’t plans on executing this piece of the legislation)
Changes in Need Analysis (how your school determines your aid package)
1. military housing is no longer considered an asset
2. veterans benefits are no longer counted as an asset effective July 1, 2010
3. A FAO (financial aid office) now has the ability to use tax returns from 2 years prior to the school year to determine an aid package
4. FAO’s can now award Dependent students whose parents refuse to fill out the FAFSA or does not help financially for college, the full unsubsidized amount (same amount that independent students get)
5. Students from the Federated States of Micronesia and the Marshall Islands now must have a ssn in order to receive aid for a college.
U.S. Agrees to Buy Student Loans to Ease Borrowing
The Education Department announced Thursday that it would buy up to $6.5 billion of federally guaranteed student loans made in the 2007-8 academic year as part of its effort to make sure loans are available.
Congress has allowed the department to buy federal loans made from 2003 to 2009, but the department has not yet used the full range of its authority. The program announced Thursday will run from December to late February.
“We have full confidence that the programs we’ve announced will work in bringing liquidity to the marketplace,” Sara Martinez Tucker, under secretary of education, said on a conference call. Eligible loans are federal Stafford loans and parent PLUS loans, she said, but not consolidation loans, which students use to combine multiple loans and make a single monthly payment. The department will pay 97 percent of the principal and outstanding interest due for loans.
Concern about availability of student loans has grown as the credit crisis has made borrowing more difficult for families. Federal loans this year have so far been available and the Education Department has not had to use its “lender of last resort” program, Ms. Tucker said.
Congress has allowed the department to buy federal loans made from 2003 to 2009, but the department has not yet used the full range of its authority. The program announced Thursday will run from December to late February.
“We have full confidence that the programs we’ve announced will work in bringing liquidity to the marketplace,” Sara Martinez Tucker, under secretary of education, said on a conference call. Eligible loans are federal Stafford loans and parent PLUS loans, she said, but not consolidation loans, which students use to combine multiple loans and make a single monthly payment. The department will pay 97 percent of the principal and outstanding interest due for loans.
Concern about availability of student loans has grown as the credit crisis has made borrowing more difficult for families. Federal loans this year have so far been available and the Education Department has not had to use its “lender of last resort” program, Ms. Tucker said.
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