September 8th, 2010 at 07:00pm
Under Uncategorized
When you were attending college, the multiple offers of student loans and the easy availability and access may have been a huge temptation that you simply could not resist. Many students rely on funding during their college years to not only pay for education, but also to help them meet the everyday expenses of being a student, such as rent or board, books, transportation, clothing, and other costs. For these reasons, many students end up with a huge student loan debt. Student loan consolidation can really turn your financial situation around if you are struggling to meet the monthly payments for your loan obligations.
Student Loan Consolidation Defined
Student loan consolidation is the process of taking many loans that were written by a multitude of lending institutions and servicers and combining them into one big student loan. It will feature just one payment to one lender and can be written at a better rate of interest with smaller, easier to manage loan payments being made each month that better reflect the income that you have available to meet your financial obligations.
Benefits of Consolidating Your Student Loan Debt
There are numerous benefits that can be reaped from loan consolidation. The most obvious benefit of consolidating your student debt is that you will make only one payment each month instead of writing checks to multiple servicers. These programs typically feature a greatly reduced interest rate on the balance owed, which can save you a ton of money over the course of repayment to all of your lenders.
Most student loan consolidations will allow the student to seek a reprieve from payment during times of hardship, such as when they are unable to find suitable employment or if they cannot make enough money to meet the payment schedule. The plans that are available under consolidation are typically very flexible and are built around the budget of the graduate in order to make their student debt more manageable.
A consolidation loan can also postpone the amount of time before the student enters into repayment, which is typically in the months just after graduation or when the student drops below half time enrollment in college. Additionally, consolidation programs will allow you to lock in a low interest rate that cannot go up even if the market fluctuates, like some variable rate loans can. Students are never penalized for paying early or for paying more than the payment due with a loan consolidation. Your interest paid during a consolidation loan is tax deductible.
Students Who Are Not Degree Holders
There should be no misconception – students are required to repay their student loans regardless of whether they finish school or not. For those students who have dropped out of school or dropped below half time enrollment, student loan consolidation is also an option that is available.
By blythe100
September 7th, 2010 at 03:50pm
Under Uncategorized
Student loan consolidation can be used by student or parent borrowers to combine their multiple education loans into one loan with one monthly payment. As any student can take either federal or private student loans, he or she can also take a federal or private consolidation loan to make the education debt more manageable.
Both federal and private student loans offer significant benefits, but federal loans offer borrowers many benefits that don’t come with private loans; for instance: low fixed interest rates, income-based repayment plans, loan forgiveness and deferment options. While some private lenders may offer them too, it usually is associated with some strings attached.
For those reasons, every borrower should always exhaust federal student loans options before considering a private loan. The same advice applies to consolidating student loans – always look at federal consolidation loan first and only if you don’t qualify for a federal loan of it is not the right choice for any reason, and then seek a private consolidation loan.
It is important to remember that a federal student consolidation loan can’t include any private loan. Moreover, if you consolidate your federal student loan into a private consolidation loan, you will lose your federal borrower benefits mentioned above (unless you private lender tries hard to get your business and includes them in the offer).
There are important differences between federal and private student loan consolidation.
First of all, with federal student loan consolidation, you will have a fixed interest rate, while private student loan consolidations are credit-based, which means that your consolidation loan rate will not be locked – it will be variable. So, while you will not have to go through credit check in order to apply for a federal consolidation loan, you will need it to secure a private consolidation loan.
Student loan consolidation rates are determined differently for federal and private consolidations. The interest rates for federal loans are set according to a formula established by federal statue. It’s a fixed rate, based on the weighted average of the interest rates on each of your loans at the time you consolidate, rounded up to the nearest 1/8th of a percent and capped at 8.25%.
As private student loans are not funded by the federal government, they are subject to the terms determined by each individual lender (bank, credit union, other financial institution) and the market competition. In private student consolidation loans a borrower’s credit is the primary factor in the variable interest rate offered to the borrower. As the base for setting the consolidation loan interest rate, the private lenders most often use the Prime rate or the 3-month LIBOR Rate, to which they add a margin. That margin varies from lender to lender and is applied according to the borrower’s credit rating.
With regards to the interest rate on the consolidation loan, it’s typical for both federal and private consolidation loan to include 0.25% rate reduction for automated debit payments.
Repayment of federal student consolidation loans begins within 60 days of the disbursement of the loan, with the payback term ranging from 10 to 30 years, depending on the amount of education debt being repaid and on other debts owned, as well as on the repayment option chosen by the borrower. Private student consolidation loans can also have repayment terms of up to 30 years, although they have fewer repayment options. Usually, repayment begins 30 days from the time your private student consolidation loan is funded.
While the most important factors looked at when deciding about how to consolidate student loans are the interest rates, borrower benefits and the terms of repayment, there are also other significant factors, such as: fees or cost to consolidate, prepayment penalties, loan amount limits, customer service, etc.
There are no fees or application costs whatsoever for processing and providing a federal student consolidation loan. It’s against the law to ask for advance (up-front) fees for arranging a federal education loan or consolidating federal education loans. However, some federal education loans (e.g. the Stafford and PLUS Loans) may require some fees, but they are always deducted from the disbursement check. On the other hand, private lenders may charge fees for application and processing private consolidation loans. Some private lenders charge fees as high as 4% of the principal you owe.
Federal consolidation loan programs don’t require a minimum balance to consolidate student loans; some private lenders require a minimum balance before they consider a borrower’s application for consolidation. That amount varies from lender to lender, but usually is between $5,000-$7,500 in US-issued private education loans.
With both federal private consolidations, there are no penalties for prepayment – all payments in excess of scheduled payments will go directly to principal and that will help to repay your consolidation loan faster.
The application process for consolidation of private student loans differs from the federal consolidation. Sometimes application for private consolidation loans may be easier to complete (often done online or over the phone). However, it’s worth remembering that federal loans usually have lower interest rates, borrower benefits and better repayment terms than private student loans. Moreover, federal applications for both original loans and consolidation loans require FAFSA, so with the federal consolidation, your application is already partly completed.
By blythe100
August 29th, 2010 at 12:37pm
Under Uncategorized
When you start dealing with student loan consolidation companies you are going to find that there are a great many people that are willing to help you, work with you, and figure it out with you. There are more student loans that are outstanding at this time than any other time in history. This is an obvious effect of the economic situation that wasn’t so obvious four to six years ago.
Now, with the apparent difficulties that recent graduates are noticing when it comes to paying their student loans back, many have no choice but to investigate student loan consolidation companies or default on the loan.
The good news is that loan consolidation plans can be highly beneficial when it comes to developing a monthly payment arrangement that you can actually afford. For many people, the consolidation companies are the only ticket to managing all of their numerous and varied financial responsibilities.
A student loan isn’t like a car loan. Most loans are deferred until after you graduate or spend at least six months out of school. When you enter into a agreement it is nearly impossible to tell what kind of financial situation you are going to be facing. Your agreement is at best, a hopeful guess at how well you’ll be doing.
Because if this interesting twist, you end up with two choices. You can either stat enrolled in school indefinitely or you can employ the services of a student loan consolidation company. Either way, it is unlikely that you are in the position to pay off the loan as initially planned.
One of the most important aspects of getting out from under the situation is clear and simple. How much longer will you be paying on the loan and what does this do to your credit? In some cases, you won’t be paying on the loan that much longer. The idea of consolidation is to lower your monthly payment by combining the payments and lowering the overall interest. However, in order to drop the payment, sometimes the terms of the loans are spread out for a longer period of time.
Additionally, agreeing to an arrangement can and most likely will have an impact on your credit. You just have to weigh that impact with the potential impact you would see if you were unable to make any more payments on your loans. This is a situation that only you can really determine what is best. Overall, the student loan consolidation companies can do their best to answer your questions while giving you the information that you need in order to make the best financial decision possible.
By blythe100
August 28th, 2010 at 08:20am
Under Uncategorized
Reduce debt by refinancing student loans may look like just a simple and a single line statement but it is something more than that because it can totally wipe out the financial woes of a student. Refinancing has emerged as a savior for the students who are financially not strong and are incapable of repaying their debts. It is also known as student loan consolidation program, which enables a student to restructure his debts, bad credits and the whole student loan. The loan can be paid back in smaller installments over a long period than the initially promised period.
Student loan consolidation can be done via two methods; federal loan consolidation and private loan consolidation.
Federal loan consolidations will be government sponsored, where the government will assess the financial conditions of the student and after assessing the whole situation, a grant is issued by the federal government that can reduce your debt repayment installments by a huge margin of up to 53 percent.
Even if you fail to get the federal grant, private loan consolidation firms can help you to consolidate your debts. The private loan consolidation program will have comparatively higher interest rates but they are equally good as federal grant programs. The repayment period is also extended under the programs that give enough time to the student to earn enough money so that he can repay the whole loan amount and the term usually lasts for 20-25 years. One can even chose to repay the loan amount before the term actually ends and the loan documents will be handed back to the student and the loan will be considered over at the same moment.
The loan refinancing programs are obtained by filing an application and the best thing is that one can file his or her application online also. All you have to do is to go to the website of concerned loan consolidation program or service provider, download the application form, fill it and mail it back to them. Your job is done there and then and once the assessment is done, you can avail the facilities of loan consolidating.
Refinancing your student loans must be understood as a revival program for the financially weak students rather than looking it as a mere statement. Now, the students need not to worry about their monthly and their educational expenses because loan refinancing and consolidation programs for students will ensure that they stick to their main aim, which is studying, whereas the financial matters will be taken care by themselves.
By blythe100
August 26th, 2010 at 09:15pm
Under Uncategorized
Nowadays, sending your son or daughter into college could be the most financially-challenging task for you; but that is okay, since student loan bill consolidation will help you fulfill your dreams for them.
Student loans can get you financially-drained after all the years of sending your children to college. You have to pay not only for the tuition fee but books, research expenses, travel allowances, dorm fees, and a lot others. That is why by the time they graduate, your debts are already neck deep, they already make you unable to breathe and think clearly where on earth you could get amounts to pay them off.
But all those loans you have accumulated over the years can be easily paid off in just a matter of few years, typically in less than five years, by getting that student loan bill consolidation.
How will it work for you?
Student loan bill consolidation is the best method that can effectively ease you out of your burdens from debts. It is very easy to understand how it can work for you after all those years of securing loans for the college of your children. Your loan installments are consolidated altogether so the debt management company could compute for you the total installment of what you have to pay them every month.
You simply take the loan from the company to pay off various student loans you got from different creditors, and then you are cleared of all the debts from others; while you in turn would receive only one bill statement from thereon and pay the company with lowered interest rates.
But before you receive this monthly installment bills, you would have to sit down with them and negotiate the best repayment plan for you. Whatever plan you would be having, it would be something that is at a much lower rate than the collective rate you get from your previous different lenders.
Rates the company could provide you vary with the duration of the installment plans. The best thing about this is that you could take the most flexible term which is according to how much you can comfortably afford to pay every month.
The classification of monthly repayment terms will be as follows:
Standard repayment plan – you can pay your dues in regular monthly installment.
Graduated repayment plan – you can pay with smaller installments earlier and the rate increases later together with the stability.
Variable repayment plan – you can pay according to more or less your overall financial situation
Extended repayment plan – you can pay on a longer duration with lower installments.
Get counseling help from the experts and advisors of the company
It is important to get student loan counseling before you decide to sign up with the loan program. Student counselors are the better persons to go to when seeking for advises regarding what best plan would be best for you to have. They are considerably more acquainted and experienced with the needs of the students, so they are more knowledgeable to guide you to choosing the best plan. They can also be your ally when you want to secure discounts and other benefits which you may be unaware of.
The consolidation loan program should be able to help you pay off debts that otherwise could be difficult maintaining with the necessary paper works each month, thereby giving you more chances to mismanage them. It should be able to provide you more flexible payments according to your capacity. It should let you clear off debts in no time at all. And most important of all, it should be able to help you improve your credit ratings so you can have more transactions and deals in the future without too much of the hassles.
You have to remember though that after taking and signing that student loan bill consolidation program, you should be more careful not to become delinquent with payments. Even a single failure to pay on time could get you in trouble, jeopardizing your chances to improve your credit scores and affecting installment rate status. Bill consolidation loans are generally easier to track because they only give you single bill statements each month for you to handle, so it would be ridiculous if you let a single default to ruin your chances to save money and clear off your debts.
By blythe100
August 24th, 2010 at 02:15am
Under Uncategorized
If you’ve got student loans, then please pay close attention! You’re about to learn a lot of valuable information about student loan consolidation that, if acted upon, could put a lot of money back in your pocket after college.
Myth: Consolidation of student loans is just too complicated to invest time in!
Fact: While it may seem complicated or time consuming, the process of consolidating Federal student loans is rather simple and the rewards are bountiful. In fact, the process has been made easier than ever by student loan companies who will do all the work for you. They will walk you through the entire process and even help you pick out the repayment package that’s best for you. Student loan consolidation can transform your loans into one, simple, manageable repayment package that’ll make paying back your student loans easier than you can imagine.
Myth: If I have a single lender, I have been told I can not consolidate.
Fact: No longer true! In June, 2006, the single lender rule was repealed by Congress and President Bush. In fact, a student loan company, OneSimpleLoan, filed a lawsuit challenging the Department of Education in June 2006. That effort was a catalyst in overturning the single lender law!
As a result, you now have the freedom of choice to consolidate your student loans with anyone you choose, regardless of who your original lender is. Make sure you choose a company that has your best interests at heart all the time.
Myth: If I consolidate my loans, I must extend the terms of my loan.
Fact: Not true. You can, indeed, maintain the exact same terms and monthly repayment amount as your original student loans. (This is a good idea, since you may be able to pay off your consolidated loan even faster!)
Myth: As long as I’m in school, I cannot consolidate any of my Federal student loans until I graduate or leave school.
Fact: Not entirely true. If you are in graduate school, you can consolidate your undergraduate school loans. Also, if you’re in a post-graduate program, such as medical school or law school, you can consolidate your undergraduate and graduate school loans!
Myth: Even if I have a high interest rate but I’ve already consolidated before, I can’t consolidate my student loans again to take advantage of a low fixed rate.
Fact: Not true. You can reconsolidate if you either received a new eligible loan since the consolidation or have left an eligible loan out of the original consolidation.
Myth: Student Loan Consolidation will hurt my credit rating.
Fact: Not true. If anything, federal student loan consolidation may help your credit rating, so that you can have the ability to obtain additional credit for things like a mortgage or a new car!
When you apply for any form of credit, such as a mortgage loan or credit card, lenders will evaluate your credit score as part of the application process. Your credit score takes into account the number of creditors you have as well as the balance of outstanding loans. By consolidating your student loans into a single loan, you can effectively decrease the number of creditors on your credit history, thereby enhancing your overall credit score.
You’ll be happy to know that at most student loan companies, there are no credit checks!
Myth: The word “consolidation” is frowned upon in the credit industry.
Fact: Not true. There are two types of consolidations in the credit world. One is consumer debt consolidation and the other is a federal student loan consolidation. Each is very different from the other. Consumer debt consolidation is usually meant for people who have had trouble paying off their bills and can really hurt their relationships with their creditors. Student loan consolidation, on the other hand, doesn’t hurt anything. No relationships are harmed because, by consolidating all your federal student loans, lenders will be paid in full and one single new loan (a consolidation loan) will be issued in its place. In fact, your credit rating may actually improve after you consolidate!
If there’s one good thing that the government has given the American student, it’s the option of student loan consolidation. If there’s anything a student should consider after graduation, it’s student loan consolidation.
By blythe100
August 22nd, 2010 at 05:15pm
Under Uncategorized
What is stimulus money? Easy! Stimulus money is that particular amount of money set aside for debt relief processes. There are billions of dollars which are given to the main credit card companies so that they can afford to reduce interest or debt. The point is that if the creditors don’t get founded by the government they won’t be able to reduce some debt without increasing the interest rates for others. Credit card companies, like any other company, are looking to make as much profit as possible, if you just give money away and you don’t get it back you will end up in a loss and eventually bankrupt.
Debt consolidation is possible due to this stimulus money. With debt consolidation you can take a loan and pay off the creditors, this may not sound like much of an option but the secret is not here. The thing about the second loan is that it is from stimulus money and you don’t have pay interest for it, so you can pay it back in a fixed amount and not worry about it growing like it would do in the case of credit card debt. Consolidating your loan can also mean to unite all your debt from different consumers so that you will have only one monthly bill to pay rather than several. I am sure that you rather pay one loan at lower interest rates rather then several with high interest.
Usually debt consolidation is used for debt small than ten thousand dollars, because mostly under this amount the real problem in paying back your debt is actually the interest and not the loan itself.
Stimulus money also aids consumes in securing debt relief by using debt settlement. With this option, a creditor will reduce your debt because he will get a part of your total amount from you and another part from government founds.
It has become clear that the government wants consumers to use a debt relief option and not just file for bankruptcy blindly without thinking about their financial future. For this purpose, stimulus money is used to give aid to any consumer in debt and at the same time make room for a better economy in the future.
By blythe100
August 21st, 2010 at 12:05am
Under Uncategorized
When deciding whether or not you should refinance your student loans, it’s important to weigh all of the benefits. One of the primary benefits of refinancing your private student loans is that if you have more than one loan, you can consolidate them into a single loan with one monthly payment. This keeps you from having to worry about keeping track of multiple due dates and writing multiple checks. Another benefit of choosing to refinance your private student loans is that you can take advantage of the many options for reducing your interest rate. Many lenders offer rate reductions for things like setting up automatic bank drafts or signing up for an online account versus receiving paper statements. You can also look forward to a lower interest rate if your credit history has improved since you originally secured your loans. A lower interest rate translates into a savings of thousands of dollars over the life of your loan.
Looking to Refinance After Consolidation
If you have already gone through the consolidation process and are just looking to reduce your monthly payments, it will be more of a challenge than if you have never consolidated before. If you find yourself in this predicament, just talk to your current lender and see what options they may have for you. Typically, they will not do much of anything if your loan payments are past-due or if you have a poor payment history. However, if your loan is in good standing, they may offer to reduce your interest rate by a point or so. If you have strong credit, you can also shop around and see what other lenders may be able to do for you. Maintaining a positive attitude is important because it may get frustrating after hearing no so many times. Many lenders back-off from voluntarily buying student loans that have already been consolidated.
Refinancing Federal and Private Student Loans Together
Many people wonder if it is possible to transfer a private student loan into a federal student loan program. Unfortunately, the answer to this question is No. Private student loans and federal student loans cannot be refinanced or consolidated together. If you have both private and federal loans, they’ll need to each be processed separately.
The Process of Securing Your New Loan
To get started, you can do some online research to find lenders that have attractive private student loan consolidation programs. You can check with the financial institution that handles your current banking needs or you can check with the major financial institutions like Chase Bank, Wells Fargo, and Citibank. There are also smaller lenders that are just as reputable and that also provide top notch customer service. Once you find a lender, you can submit an application online (or in person) to initiate the process. You can expect the processing of your application and distribution of your loan to take anywhere from 45-60 days. During this time, the company will contact your current lenders and get the payoff amounts on your loans. They’ll need this information to originate your new loan and pay off your existing loans. Once all of that is finalized, you’ll be sent paperwork telling you how much your payments will be and when your payments are due. You should also receive a letter from your first lenders stating that your loans were paid in full.
Buyer Beware
It’s important to note that you should always deal with a lender that engages in ethical lending practices and that has a strong reputation in the community. The Better Business Bureau is a great resource for verifying whether there are any customer complaints against a particular company.
By blythe100
August 16th, 2010 at 05:05am
Under Uncategorized
Free debt consolidation programs exist to help individuals, to come out of various financial crises. These programs prove to be effective and are found to be helpful in several ways. They are run by nonprofit organizations and hence are called free programs. However it would be worthwhile to check the hidden costs before committing.
These programs were basically drafted for people, who are unable to pay off the monthly installments on various debts. An individual having trouble meeting the minimum monthly payments on their bills, should turn to these non-profit debt consolidation companies for help.
It is seen that several companies with counseling offices provide such programs. This enables customers to speak to a certified consolidation specialist, a professional who will design a payment plan, specific to individual needs.
The counselors are trained to take a proactive approach, to both the clients’ and the creditors’ needs, and try to find a path that will provide solace to both. The certified financial counselors working under these programs have special expertise in debt policies and rules. Hence they work as a link between both the consumer and the creditor. They aim at working for an outcome that would be a debt with lower interest rates.
Debt consolidation programs also help to reduce monthly payments and late payment charges. They claim that the counselors are working on the client?s behalf and not for the creditor.
The programs also offer flexible options to make payments for their consolidated debt loans. The customer is benefited, as they do not have to worry about individual monthly installments and only a consolidated single payment has to be made.
There are various sites online that also offer several programs for individuals, unable to pull on under the load of too many debts. It is however advisable to check the genuineness of the program before enrolling.
By blythe100
August 3rd, 2010 at 01:45pm
Under Uncategorized
Do you need debt consolidation? That’s not asked as a question of trying to sell you onto the services. That question is asked because I want to know if you believe you’re a good customer for debt consolidation.
There are a lot of people who could benefit from debt consolidation. If you have a lot of debt spread out with multiple interest rates, and you can secure a loan that not only has a lower interest rate, but lets you have more money in your pocket to put towards other things, it could be a good thing. If you’re in some immediately trouble and you need a debt consolidation loan that you can pay off slowly and in a different fashion, such as through a home equity loan, that might work out for you also.
However, if you decide to go with some kind of debt consolidation, you need to know that you’re capable of following through on what will keep you out of debt for the long haul. You have to determine if you’re willing to do the research and work necessary to make the best decision for yourself. And you need to be ready to be fully honest with yourself; otherwise you’ll just be wasting your time.
For instance, you don’t want to go into any debt consolidation deals if you don’t have the discipline to not take on any new debt. What good does it do you to consolidate all of your debt so you can have some extra money, then go back on a spending spree because you suddenly have a lot of freedom from high credit card balances? All you’ll do is run yourself back into the same hole, without the potential benefit of getting a second loan, especially if the first one hasn’t been paid off.
If you actually make enough money to pay off your bills, but you haven’t been doing it, you have to ask yourself if debt consolidation is what you need to be doing. You’d be better working with someone who can put you on a budget, or even paying someone to pay your bills for you and to give you an allowance.
And finally, if you’re not making enough money to begin with, why would you believe that consolidation is the way to go, at least traditional consolidation? In this case, going to someone like Consumer Credit Counseling is probably the best way to go, but if you go to them you’ll have to cut up all of your credit cards. Are you ready for that kind of adult step?
There’s a lot to think about before you decide on a debt consolidation move. It’s not the panacea for everyone.
By blythe100
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