terça-feira, 12 de janeiro de 2010

Student Loans - Some Basics

Thinking about getting a student loan to help pay for your college education? You're not alone. About two-thirds of all people attending public and private colleges and universities take out student loans. This is a necessity because the cost of higher education has soared in recent years. The Project on Student Debt reports that for 2007 graduates, the average student borrower graduating from a private institution had a student debt of $25,700, and the average graduate borrower in a public institution has a debt burden of $19,400.

What Is A Student Loan And Why Did Student Loans Come Into Being?

These might seem like simple questions, but the mechanism is quite complex. Obviously a student loan is money that is lent to a student to pay his or her expenses while pursuing a course of study at an institution of higher learning. These expenses include room and board, tuition, text books, perhaps travel to and from school, and other student fees and expenses. The complexity arises because most students are young and have not established a credit history which would enable them to get a loan. Also, the repayment schedules can last very long, sometimes as long as repaying the mortgage on a house, for example. Essentially the student and the creditor are betting that with the degree earned in college the student will earn more money in his or her profession than he or she would without the degree and that with the proper repayment terms the student loans will be affordable for the student for the life of the loan. Student loans can be government backed loans or private loans. All students should start their loan search by applying for government backed loans before looking at private loans. Government backed or federal loans have many advantages that private loans do not.

How Do I Apply For A Student Loan?

After sending in an application to one or more colleges and universities, you must fill out a FAFSA (Free Application for Federal Student Aid). The Department of Education will then complete a SAR (Student Aid Report) and this is sent to the institutions to which you applied for admittance. These institutions will then determine your EFC (Expected Family Contribution). This is used to determine how much federal student aid would be available to you. The difference between the amount of loans you can secure and the total cost of your schooling is the amount that you and your family will have to come up with. PLUS loans (Parental Loans for Undergraduate Studies) are federally backed loans available to the parents of students, and about 10% of student families take out PLUS loans to help supplement college costs.

Some Basic Advice

After leaving school and starting your work career it will be time to start paying back your loans. Whatever you do, do not default on your student loans. If money gets tight you can change your repayment plan to have lower payments. In some cases you can defer payments for a while. You might even qualify to have some of your debt forgiven if you go into the military, public service, work for a federal agency, or are employed in certain healthcare jobs. But in any case do not default on your student loans because if you do you will lose some of your options, not to mention creating a bad credit rating that will make your life difficult for quite a few years. It is truly a shame that about 20% of student borrowers reportedly have delinquent loans after only 3 years of loan repayments. You should make an effort to know your repayment options and avoid being part of that 20%.

Can I Get Out Of My Student Loans By Declaring Bankruptcy?

No, neither federal nor private student loans can be dismissed if you declare bankruptcy except under very rare instances, so that is not a real option.

College Student Loan Consolidation - Pros and Cons

Once you get near the end of your college career, something you'll probably be considering is college student loan consolidation. Of course, while there are many benefits to consolidating, you'll find that it's not all about the positive side. There are both pros and cons that you need to consider before you decide whether or not these consolidation loans are right for you. Here's a look at the pros and cons of college student loan consolidation to help you make the best financial decision.

There are some very obvious pros to consider if you are thinking about consolidating your college loans. Of course, one of the most obvious pros is that you can often reduce your payments when you go with a good consolidation loan. Another pro is that usually you can reduce your interest rates as well. Reduced interest rates can help you to save quite a bit of money over time. If you have a lot of loans to deal with, this can help you get your financial future started and it can save you money as well.

Another pro is better organization when you go about consolidating college student loans. It can be difficult to keep up with many different loans that you accrue through your college education. However, when you do consolidate into one loan, instead of having to remember several different payments, you only have to remember one, which is definitely a positive.

There are indeed many pros to consolidating your student loans, but there are also some cons that you need to think about as well before you make the final decision. Once you consolidate, this is pretty final. You can reconsolidate once in most cases, but you can only do this to consolidate together two consolidate loans or to add another loan to the consolidation.

Bad Credit Student Loans - Get Approved Immediately

Are you a student who feels let down by the government financial aid and government student loans process? You probably have many needs that go unmet, and oftentimes students with bad credit do not qualify to borrow money under a private student loan structure. There are ways to borrow private student loan money without having a stellar credit score, however. A bad credit private student loan is your best bet.

Money For Student Expenses Beyond Grants and Government Loans

Students have a plethora of expenses, and as you likely know, even the most comprehensive financial aid package and loan package from your student aid office rarely covers all of the expenses that you have. Student expenses are soaring with each new school year. Books, tuition, computers, clothing, housing, meals, entertainment. Like everything else in the economy, student expenses are through the roof. Even if you are eligible for the maximum amount of aid, you still fall short.

Private student loans are not needs based like federal aid and loans are, but they are credit based. That means that you face difficulties when applying for this type of loan. However, student with bad credit can always apply with a creditworthy cosigner to secure it. This loan can be in amounts up to $30,000 a semester, which is money in addition to the grants and loans you already receive. Even if you have exhausted your Perkins or Stafford loan funds for the semester, you can apply for this loan any time of the year, even in the summer and between semesters.

Do You Have A Cosigner?

Your cosigner plays a very vital role in securing your bad credit student loan. Your cosigner can be your parent, sister, brother, aunt, uncle, or other relative or even a family friend. If you do not have a cosigner, there are alternative options that will allow you to apply by yourself. These loans will be written at greater amounts of interest, however, and in lesser amounts that you may need.

For this reason, having a cosigner is optimal, but you can always go it alone and borrow a lower amount of funds. Before applying alone on the private student loan application, you should always check your credit report to make sure that your credit is actually as bad as it looks. Are there erroneously reported items that you can dispute in order to raise your score? The majority of credit reports contain some errors, so check yours to make certain that it is accurate.

Being A Responsible Borrower

While private student loans do fill the broad gap that exists in student budgets, it is important to become a good borrower and put yourself on the road to financial freedom through good credit when you receive a loan for bad credit. Never borrow in excess of what you truly need. Although most private student loans do not require payment until many months after graduation, you should prepare in advance to become a good steward of your student loan payments by paying on time each and every month. These types of loans report to the credit reporting bureaus and can be a real asset as you build the type of credit that is needed to purchase a home or car in the future.

Student Loan Consolidation to Reduce to Debt

If there is something that is rather hard to grapple, it is going through many years of education from grade, high to college levels and after becoming a professional through sheer hard work and immaculate dedication, you realize you are facing a mountain of bills from the student loans you made use of. As much as lenders give one about six months to clear the bills after one has graduated, it is a daunting task all the way to find a well paying job enough to cover all the expenses that one has as well as the student loan debt one has. Hence you need to plan things well, or it could be a problem.

It is important to take student's loan now as the education is becoming more and more expensive by the day. People are finding it very difficult to fund their education as in most cases it is out of reach of a common man. Hence they go in for a student's loan. Once their college is over, they need to start paying the loan amount, which they had taken for education. The way out of this is Debt consolidation, which will help you to clear off your loans with, the help of one simple monthly payment. This takes away confusion of making multiple payments and will reduce your interest rate.

So many times lots of individuals do have multiple loans of student nature that could put a significant dent on ones monthly income. The first thing one has to do is look around for a better lender who might aid one in debt consolidation. There are times huge financial institutions such as the Bank of America and Wells Fargo that offers you a rather low interest percentage after you have been able to consolidate all of your loans into one lowered payment. This will undoubtedly help in managing the whole loan.

It is very important that you take time to find out more about student loan consolidation and protect your credit score, which is a very important parameter. Once you complete your school you will have lots of dreams and to accomplish them, you may need loans and hence do not let loan debt stand in the way of accomplishing your dreams.

If you have got multiple loans running then it is important that you take a smart financial decision by taking help of student loan consolidation. You have the assonance of the counsellor to find more information on this and to help you decide the right amount to pay off your loans. These opportunities are very important that and should be taken advantage of. While going in for a debt consolidation program you need do the right kind of research and find out a program, which is offering lower interest rates. It is important that your consolidation process offers you much lesser interest then otherwise only then it makes sense.

How to Get the Lowest Student Loan Consolidation Rate

If you are thinking about consolidating your student loans, one of the most important things to consider is the rates offered on the loan. You definitely want the best possible rate, and it definitely needs to be lower than the rates you are already paying. Consolidation loans are not worth it if you can't lower your interest rates. Wondering how to get the lowest student loan consolidate rate? Here are some tips to help you out.

1. Start by Checking with Various Lenders

The first thing you should do if you want to get low rates on a consolidation is to check with various lenders. Whether you are consolidating federal loans or private loans, there are quite a few different lenders that you can consider. Take a look at different quality lenders. Find out what rates they can offer you. By comparing, you are able to find the best possible rates available on consolidation loans for students.

2. For Private Consolidations - Credit is Key

If you are consolidating your private student loans, credit is key. While federal consolidations aren't based upon your credit, private consolidation loans are. The better your credit, the better the rates will be. If you have a bad credit score, you'll end up paying more. So, if you want to consolidate those private loans, you definitely want to get your credit into shape for the best possible rates.

3. Use a Good Loan Calculator

Use a good student loan consolidation calculator to help you figure out how much lenders can help you save. These calculators will help you compare the interest and payments of your current loans to a new consolidation loan. It can help you to figure out whether or not a consolidation loan can help you to save money and if the rates you are being offered are really going to result in financial savings.