Student loan consolidation and refinancing of a loan is a convenient way to pay. With this you can consolidate your student loans into one large loan, thus reducing the periodic payment.
Consolidation of student loans, low interest rate is applied with a long maturity. The monthly payments are cheaper than the original than the student loans. Before the consolidation Interest rate, credit history and on-line calculator: Student Loans considered the three factors are considered. We address them one by one.
Interest rate is at first. Before applying for a consolidation loan, you'd better and calculate the monthly payments in addition to the rate of interest which is paid and the cost of the entire operation of the two loans. This may be the student or the borrower's actual configuration of As he, when he joined to pay off debts.
Secondly, the credit history. Maintaining a good credit history is extremely important because the creditor to refer to these borrowers to verify their credibility, to make payments. In a credit history, shows the complete documentation of an individual or company's past borrowing and repayment behavior. Almost all banks would like additional conditions for students with a good credit history. Who is to keep a good credit history put simply banking services accessible as good rates and terms. Manage your money wisely, and groped to resolve the debt.
Third, online calculator. You can see this anywhere on the network. Many credit bureaus and mortgage companies offer regular payment calculators on their websites. With the help of these online calculators allow students to understand all possible options for consolidation loans before being applied.As a responsible borrower, you will extend to all means to get good prices and exploit the best conditions of the banking consolidation offer. I think every student loan consolidation, the same ultimate goal, which is clear of debt and maintain a good credit standing with creditors.
The best consolidation companies online
If you look online, then these companies are highly recommended by many, as they offer good prices and you can save money by using your Student Loans: Loan Approval Direct, Next and Debt Consolidation student.
Choosing the Best Student Loan Consolidation Companies
When it comes to choosing the best student loan consolidation company is not trying so impulsive. Watch these three factors: interest rate, credit history and on-line calculator. Ask yourself the following questions. I will be this bank offers favorable terms, if I have agreed to consolidate my debt to them? These are business loan offers other benefits? These benefits as well, if the decision in these financial institutions. Make sure that if you are looking for something that you fully understand the conditions that go with it. I guarantee that loan company is being asked to cancel the contract once they have found the right sign. But before you do, be sure to be able to evaluate all possible Offers. They compare all the loan rates and terms of consolidation. If you are unsure of the contract is not signed. You may end up regretting his decision later. Remember that you are consolidating your loans to solve financial problems for you and not in a debt trap all over again!
Wednesday, September 21, 2011
Private Student Loan Consolidation Vs Federal Student Loan Consolidation
Many students and former students have probably heard about loan consolidation, federal student loan consolidation or other ways of combining student loans into a more manageable payment.
At the same time, it is a misunderstood topic because of the wide array of student loans that are given to students, and the different rules regarding their consolidation. In this article, I'll attempt to clear up some of the difficulty regarding this topic, and provide some insight into those wishing to consolidate.
What is student loan consolidation?
While many of you have undoubtedly heard or seen TV commercials for bill consolidation, debt consolidation and other types of payment relief, loan consolidation has nothing to do with any of those options. Simply put student loan consolidation is designed for one type of debt, those loans that were obtained specifically for the purpose of going to school, almost always for higher education.
Unlike Auto loans or Mortgage loans, students will often access a wide variety of loan types to obtain the total funding needed to complete the financial picture of obtaining a degree. Loans are obtained from different sources, such as the Federal government, private banks, and other entities at different times during the course of a college career. Usually, once the degree is completed, or the student has otherwise separated from school, they may have a confusing patchwork of loans with different amounts, rates and terms. Usually, this can add up to a hefty payment once school is complete and the 6 month grace period has expired. Consolidation allows students to combine all of these loans into one loan with a lower, single monthly payment.
Which is better Private or Federal Student Loan Consolidation?
The short answer is that Federal student loan consolidation is always going to be a lower rate and less expensive option because the government backs the loans and consolidating federal loans is easy, painless, and essentially cost free as long as you are qualified. The key element to remember here is that most students have combination of private and federal loans. Because you cannot include private loans in a federal consolidation, a federal consolidation only partially solves the problem for many students.
A private consolidation may also help you out in terms of your monthly payment, but is not assured to do so primarily because the entire consolidation has higher qualification requirements and is not backed by the Federal government or the Department of Education.
Hopefully, this brief overview has helped you sort out some of the differences between the different type of consolidation loans that are available for students. To learn more detail about these private student loan consolidation and federal student loan consolidation, check out the link below.
Neal Coxworth is an entrepreneur and a 17 year veteran of the consumer credit industry with experience in originating, underwriting and processing mortgage, student and consumer credit loans. He publishes an informational blog for consumers to provide insight and analysis to all major loan types as well other topics such as credit history, that most consumers will face.
At the same time, it is a misunderstood topic because of the wide array of student loans that are given to students, and the different rules regarding their consolidation. In this article, I'll attempt to clear up some of the difficulty regarding this topic, and provide some insight into those wishing to consolidate.
What is student loan consolidation?
While many of you have undoubtedly heard or seen TV commercials for bill consolidation, debt consolidation and other types of payment relief, loan consolidation has nothing to do with any of those options. Simply put student loan consolidation is designed for one type of debt, those loans that were obtained specifically for the purpose of going to school, almost always for higher education.
Unlike Auto loans or Mortgage loans, students will often access a wide variety of loan types to obtain the total funding needed to complete the financial picture of obtaining a degree. Loans are obtained from different sources, such as the Federal government, private banks, and other entities at different times during the course of a college career. Usually, once the degree is completed, or the student has otherwise separated from school, they may have a confusing patchwork of loans with different amounts, rates and terms. Usually, this can add up to a hefty payment once school is complete and the 6 month grace period has expired. Consolidation allows students to combine all of these loans into one loan with a lower, single monthly payment.
Which is better Private or Federal Student Loan Consolidation?
The short answer is that Federal student loan consolidation is always going to be a lower rate and less expensive option because the government backs the loans and consolidating federal loans is easy, painless, and essentially cost free as long as you are qualified. The key element to remember here is that most students have combination of private and federal loans. Because you cannot include private loans in a federal consolidation, a federal consolidation only partially solves the problem for many students.
A private consolidation may also help you out in terms of your monthly payment, but is not assured to do so primarily because the entire consolidation has higher qualification requirements and is not backed by the Federal government or the Department of Education.
Hopefully, this brief overview has helped you sort out some of the differences between the different type of consolidation loans that are available for students. To learn more detail about these private student loan consolidation and federal student loan consolidation, check out the link below.
Rising Student Loan Default Rates
There was a recent report highlighting the increase in student loan default rates to 8.8% from 7%. The rates rose across all sectors-- public, private and for-profit schools. The higher rates are a reflection of harder economic times, especially for new college graduates. A PNC Financial Services Group survey of 20 somethings found:
- Only 23% consider themselves financially independent
- 30% have a job in their chosen field
- 40% relay on two or more sources of income (multiple jobs or income from family members)
With the low employment prospects and high debt load, it is easy to see why many 20 somethings are feeling pessimistic about their futures. Most of us are not in the position to change the economic outlook but we can share information to help this generation and the one following it make smart financial decisions. Talking to the students who are preparing to enter college about their school choices, financing options and ways to reduce the cost of a college education is always helpful. For the recent graduates, making them aware of the repayment options for student loans and creating strategies for reducing debt are other helpful steps.
Are you a member of the WSCPA? WSCPA members have access to resources to assist members with making presentations to high school students and college students.
How to Pay Off Student Loan Debt With No Money
Student loan debt is one of the main obstacles new graduates have. That is one reason to keep track of how much you are borrowing when you are going to school. For example if you graduate owing $19,000 in student loans (the average student-loan debt among graduating seniors) at 6.8%. If you want to repay the loans in ten years it would require a monthly payment of about $220. If you allow 10% of your salary to student loan repayment, you would need a salary of $26,400 to cover this.
Most student loans start coming due within 6 months after you graduate. This was probably assumed to be an adequate amount of time to secure a job. With the current economic condition it is taking longer to find a job and to find one that pays enough to cover your education costs and other expenses. Some graduates are having to accept jobs out of their field and for lower pay just to get a job.It is nearly impossible to pay off debt if you are not making any money. If you can prove you are experiencing a hardship, you can apply for deferment. But this only postpones the problem. You can usually defer the loans up to one year, but the interest keeps increasing and is added to the amount you owe when you start making payments again. Eventually, you will need to find a way to make payments on the amount you owe. In most cases, student loan debt is not discharged when filing for bankruptcy.
If you do not make any payments on your loan in 270 days it will go into default. Once a loan goes into default it will go to a collection agency and they can garnish your wages and your credit score with drop significantly.
So even though a college education is probably necessary in a lot cases, keep an eye on how much you are borrowing and what it will cost you to repay it. Some students take out more in loans than they need considering it free or found money, but you will eventually need to repay it plus interest.
When considering how much your monthly student loan payments will be you also need to take into consideration the other payments you are going to have each month. Those separate payments can add up quickly and may be more than you will be earning
Most student loans start coming due within 6 months after you graduate. This was probably assumed to be an adequate amount of time to secure a job. With the current economic condition it is taking longer to find a job and to find one that pays enough to cover your education costs and other expenses. Some graduates are having to accept jobs out of their field and for lower pay just to get a job.It is nearly impossible to pay off debt if you are not making any money. If you can prove you are experiencing a hardship, you can apply for deferment. But this only postpones the problem. You can usually defer the loans up to one year, but the interest keeps increasing and is added to the amount you owe when you start making payments again. Eventually, you will need to find a way to make payments on the amount you owe. In most cases, student loan debt is not discharged when filing for bankruptcy.
If you do not make any payments on your loan in 270 days it will go into default. Once a loan goes into default it will go to a collection agency and they can garnish your wages and your credit score with drop significantly.
So even though a college education is probably necessary in a lot cases, keep an eye on how much you are borrowing and what it will cost you to repay it. Some students take out more in loans than they need considering it free or found money, but you will eventually need to repay it plus interest.
When considering how much your monthly student loan payments will be you also need to take into consideration the other payments you are going to have each month. Those separate payments can add up quickly and may be more than you will be earning
Student Loan Consolidation: Best Tips For Reducing Loan Payments
College graduates know how hard they worked to get through school: they dealt with the pressure to choose the right major, the long study hours . . . and the responsibility to pay for it all. It is no wonder that graduates consistently feel a sense of pride and achievement as they receive their diplomas on graduation day.
Of course, with graduation comes more responsibility: finding employment, finding a place to live, and trying to carve out a life for oneself. For graduates who funded most or all of their education with student loans, they are faced with the added level of responsibility of repaying those loans.
Many people with college or graduate school degrees have had to take out multiple loans over the course of their education. This means that they are now faced with having to repay different lenders, with different bills due throughout the month. Managing all of it can be complex. Another challenge is that the monthly payments can be overwhelming. For people in their 20s and 30s, in particular, cash is often tight. They can find themselves barely able to make ends meet - even before they factor in their student loan payments.
For graduates who still have multiple student loans and are having trouble making their monthly payments, student loan consolidation can be an excellent solution.
Why You Should Consider Student Loan Consolidation?
The benefits of student loan consolidation are many. For one, you are usually able to get a consolidation loan with longer repayment terms than the loans you have now. This means that you can stretch your payments out over more years, thereby reducing the amount of those payments each month. Another benefit is that consolidating your loans gives you the opportunity to lock in a fixed interest rate. For federal consolidation loans, your interest rate will simply be the weighted average of those of your existing loans. For private consolidation loans, the rate will be determined by a combination of some standard rate (like the prime rate) and your credit score. Either way, having a fixed interest rate can give you peace of mind.
Finally, there is the added benefit that you are able to simplify the financial part of your life by only having to make a single payment to a single lender each month.
Student Loan Consolidation: Best Tips For Reducing Loan Payments
If you are considering student loan consolidation, here are the 5 best tips for reducing your monthly payments:
1. Know your credit score: Always research your credit score with all three of the major bureaus, since your score may vary from one to the next. (Note: for federal consolidation, skip this step as your credit score will not factor into your interest rate).
2. Take an accounting of all of your current loans: List out all of your current loans by lender name, amount of outstanding principal, and interest rate.
3. Decide how much you would like your monthly payments to be: If you opt for a longer repayment period of say 20 or 30 years, you can reduce your payments. But, of course, doing so will also increase the total cost of your loan.
4. For private loans, be sure to compare multiple lenders: More choices is always good when it comes to loans. Apply to 5 or more private consolidation lenders to increase your chances of getting the best deal.
5. Do not take the first offer you receive: No matter how good the first offer you get is, do not accept right away. Take your time and review all options before deciding upon a lender.
Considering these 5 tips as you move through the consolidation process could help you significantly reduce your monthly loan payments.
Of course, with graduation comes more responsibility: finding employment, finding a place to live, and trying to carve out a life for oneself. For graduates who funded most or all of their education with student loans, they are faced with the added level of responsibility of repaying those loans.
Many people with college or graduate school degrees have had to take out multiple loans over the course of their education. This means that they are now faced with having to repay different lenders, with different bills due throughout the month. Managing all of it can be complex. Another challenge is that the monthly payments can be overwhelming. For people in their 20s and 30s, in particular, cash is often tight. They can find themselves barely able to make ends meet - even before they factor in their student loan payments.
For graduates who still have multiple student loans and are having trouble making their monthly payments, student loan consolidation can be an excellent solution.
Why You Should Consider Student Loan Consolidation?
The benefits of student loan consolidation are many. For one, you are usually able to get a consolidation loan with longer repayment terms than the loans you have now. This means that you can stretch your payments out over more years, thereby reducing the amount of those payments each month. Another benefit is that consolidating your loans gives you the opportunity to lock in a fixed interest rate. For federal consolidation loans, your interest rate will simply be the weighted average of those of your existing loans. For private consolidation loans, the rate will be determined by a combination of some standard rate (like the prime rate) and your credit score. Either way, having a fixed interest rate can give you peace of mind.
Finally, there is the added benefit that you are able to simplify the financial part of your life by only having to make a single payment to a single lender each month.
Student Loan Consolidation: Best Tips For Reducing Loan Payments
If you are considering student loan consolidation, here are the 5 best tips for reducing your monthly payments:
1. Know your credit score: Always research your credit score with all three of the major bureaus, since your score may vary from one to the next. (Note: for federal consolidation, skip this step as your credit score will not factor into your interest rate).
2. Take an accounting of all of your current loans: List out all of your current loans by lender name, amount of outstanding principal, and interest rate.
3. Decide how much you would like your monthly payments to be: If you opt for a longer repayment period of say 20 or 30 years, you can reduce your payments. But, of course, doing so will also increase the total cost of your loan.
4. For private loans, be sure to compare multiple lenders: More choices is always good when it comes to loans. Apply to 5 or more private consolidation lenders to increase your chances of getting the best deal.
5. Do not take the first offer you receive: No matter how good the first offer you get is, do not accept right away. Take your time and review all options before deciding upon a lender.
Considering these 5 tips as you move through the consolidation process could help you significantly reduce your monthly loan payments.
How Debt Consolidation Can Build Your Credit
The debt management industry and the services within can be easily confused. While some consumers think debt management programs hurt credit there are some plans that can actually improve credit while enrolled. Primarily, it depends on the status of your accounts upon entering a program and selecting the program that best suits your current financial situation and long term credit goals. A debt consolidation plan makes payments each month as received from the client, helping improve the score over time. A debt settlement plan, often confused for consolidation, places accounts in a charged off status to enable balance negotiations. The only problem with a settlement plan is that the accounts have to first charge off before negotiating a lower balance pay off. Once an account charges off though, it remains as a negative on your credit for 7 years- paid in full or not. That’s only 3 years less bad credit than filing bankrupt.
Debt consolidation- not debt settlement- can help improve your credit score over time while paying back the debt. Accounts may be reported to the credit bureau as ‘being paid by a third party’. This notation does not affect your actual numeric credit score negatively or positively. It doesn’t hurt your credit rating in any way, shape, or form. At the end of the day, creditors and the credit bureau do not care who or how your payments are made, long as they’re made on time and consecutively each and every billing cycle. A debt consolidation plan makes the payments to creditors every month as payments are received from their clients. The due dates are renegotiated along with the other terms to ensure payments are considered timely and report positively, improving the score.
Making payments on time is the biggest factor in what affects your credit rating on a regular basis. 35% of your score is made up of timely monthly payments each billing cycle. In a consolidation plan, the due date is changed to coincide with a time that better fits your other monthly obligations and pay schedule and ensures timely payments right from the start of enrollment.
Did you know? Spending more than 30% of your available balance lowers your credit score? That means if you have a credit line of k, keeping a balance of more than 00 is negatively impacting your credit. 30% of your credit score accounts for how much total outstanding debt you owe. These accounts may be being paid on time every month but if the balance is above 30% of the credit line the payments aren’t helping as much as they could.
Standard minimum monthly payments are designed to pay off 1% of the balance with every minimum monthly payment. That means if you stop spending on your account it could take around 100 minimum monthly payments to pay back your total debt at the standard rates, or 8.3 years. In a debt consolidation plan the interest rates are reduced to lower fixed rates, usually in the single digits. This allows the consumer to have the majority of the payment apply to the balance instead of the interest, bringing the balances down much faster- lowering your overall debt amount at an accelerated rate.
Standard rates and terms issued by big banks direct to consumers are set at a rate that would take over 8 years to payback with minimum monthly payments. In a debt consolidation plan, the minimum monthly payment requirement coincides with the interest reductions in an effort to get the consumer out of debt in 5 years or less, applying the majority of your minimum monthly payment to the principle balance not the interest fees.
You can still obtain new lines of credit while consolidating you debt. It’s not ideal….as the point is to get OUT of debt not incur more- but you can nonetheless. Not every account has to be consolidated either. Dent consolidation is not an all or nothing deal. Pick and choose which creditors are charging you too much in interest and only consolidate those accounts. You can always add or remove accounts from a consolidation plan at a later time without being charged anything additional.
One lower monthly payment. Lower fixed interest rates. No late fees. No creditor calls. Improving credit on a monthly basis. Debt free in 5 years or less. For more free information or a free financial consultation contact a certified credit counselor at a nonprofit debt consolidation organization accredited by the Better Business Bureau. Call 800-905-1563 or visit our website freedomdm.org and complete our contact request form or LIVE CHAT with a counselor during business hours. Freedom Debt Management is a BBB accredited A+ nonprofit organization helping people become debt free one household at a time. You can be debt free, Freedom Debt Management can help.
Credit counselors work with consumers to assess their financial situation and determine what their best option may be.
Debt consolidation- not debt settlement- can help improve your credit score over time while paying back the debt. Accounts may be reported to the credit bureau as ‘being paid by a third party’. This notation does not affect your actual numeric credit score negatively or positively. It doesn’t hurt your credit rating in any way, shape, or form. At the end of the day, creditors and the credit bureau do not care who or how your payments are made, long as they’re made on time and consecutively each and every billing cycle. A debt consolidation plan makes the payments to creditors every month as payments are received from their clients. The due dates are renegotiated along with the other terms to ensure payments are considered timely and report positively, improving the score.
Making payments on time is the biggest factor in what affects your credit rating on a regular basis. 35% of your score is made up of timely monthly payments each billing cycle. In a consolidation plan, the due date is changed to coincide with a time that better fits your other monthly obligations and pay schedule and ensures timely payments right from the start of enrollment.
Did you know? Spending more than 30% of your available balance lowers your credit score? That means if you have a credit line of k, keeping a balance of more than 00 is negatively impacting your credit. 30% of your credit score accounts for how much total outstanding debt you owe. These accounts may be being paid on time every month but if the balance is above 30% of the credit line the payments aren’t helping as much as they could.
Standard minimum monthly payments are designed to pay off 1% of the balance with every minimum monthly payment. That means if you stop spending on your account it could take around 100 minimum monthly payments to pay back your total debt at the standard rates, or 8.3 years. In a debt consolidation plan the interest rates are reduced to lower fixed rates, usually in the single digits. This allows the consumer to have the majority of the payment apply to the balance instead of the interest, bringing the balances down much faster- lowering your overall debt amount at an accelerated rate.
Standard rates and terms issued by big banks direct to consumers are set at a rate that would take over 8 years to payback with minimum monthly payments. In a debt consolidation plan, the minimum monthly payment requirement coincides with the interest reductions in an effort to get the consumer out of debt in 5 years or less, applying the majority of your minimum monthly payment to the principle balance not the interest fees.
You can still obtain new lines of credit while consolidating you debt. It’s not ideal….as the point is to get OUT of debt not incur more- but you can nonetheless. Not every account has to be consolidated either. Dent consolidation is not an all or nothing deal. Pick and choose which creditors are charging you too much in interest and only consolidate those accounts. You can always add or remove accounts from a consolidation plan at a later time without being charged anything additional.
One lower monthly payment. Lower fixed interest rates. No late fees. No creditor calls. Improving credit on a monthly basis. Debt free in 5 years or less. For more free information or a free financial consultation contact a certified credit counselor at a nonprofit debt consolidation organization accredited by the Better Business Bureau. Call 800-905-1563 or visit our website freedomdm.org and complete our contact request form or LIVE CHAT with a counselor during business hours. Freedom Debt Management is a BBB accredited A+ nonprofit organization helping people become debt free one household at a time. You can be debt free, Freedom Debt Management can help.
Credit counselors work with consumers to assess their financial situation and determine what their best option may be.
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