A Complete Review on Student Loans Refinancing

A Complete Review on Student Loans Refinancing  

Student loan refinancing could reduce the monthly payments for student's loan.
There are several considerations in loan refinancing for student's loan because all those who take student's loan would have opted for a federal loan before and hence refinancing both must involve certain issues.

Student Loan Refinancing Issues:

One must understand that repaying federal loans would be much easier than repaying student loans. Federal loans are structured in a different way from that of the student's loan. Students loan is based on the consideration that, "the higher the educational status the higher the income is". Hence, this would demand a higher interest rate. Combining both the principal amount from the federal and the student loan would be tedious, as they would end up in a higher interest rate. Hence, repay them separately or go in for a consolidation program when you have more than two sources of loan.

One must understand that the interest rates are not fixed for the entire term. It changes from year to year.
Each lender specifies a qualifying criterion for a low-interest rate refinance for the student loans. It depends solely on the agency and the lender's policy statement.
On refinancing student's loan one can sufficiently reduce, the monthly payments by getting low interest rates. One can also extend the loan term when a repayment is made. This is also lender dependent. It also depends on the student who owes the loan. Most students prefer a low interest rate compared to the extension of the term of loan.

In some special cases, extension of loan term may be needed too. When you extend the loan, term repayment would be in petty amounts. However, remember the longer you pay the higher gets the interest rate. Still the repayment would become manageable.

Refinancing would once again require processing fee and other paper work too.
Some agencies may demand you penalty for closing the loan.
-Considering all these issues repayment must be decided.

Student Loan Refinancing Advantages:

One can save a lot of money on repaying the loan amount and none would be ready to understand this issue. Student's education would involve an array of loans on books, tuition and many more.
All these piling up on the interest rate would be too high that this would topple you up. Instead repaying the possible loans would bring down the interest rates and reduce certain loans from the array we hold. One can start repayment through internet or any other procedures that is acceptable.
Interest rate reduces by .60% when the student loan is refinanced during the grace periods.
Lender incentives can save money when it's time to refinance student loans
Deferment and Forbearance starts over

529 College Savings Plans Provide a World of Options

529 College Savings Plans Provide a World of Options  

When Kelly Davidson (1) decided she wanted to transition from a career as a high school teacher, she knew she'd have to go back to school to achieve her goal-and it would be costly. She also knew that pursuing a graduate degree would potentially impact her ability to save for retirement, so she met with her Smith Barney Financial Advisor to develop a strategy that would help enable her to return to school in five years.

With time being a key factor, the Advisor suggested that a 529 College Savings Plan-named after the section of the IRS code that authorized their creation-would be the best way to meet Kelly's education-funding goals. Using the proceeds from a settlement, Kelly set up a 529 plan for herself and launched a systematic investment plan to help her potentially maximize the account's value. Kelly's Five Year Plan was well under way, but there was one thing she hadn't planned for: right before she was slated to return to school, Kelly's husband, an executive at a multi-national corporation, received a lucrative job offer-in London. Unfortunately, Kelly's qualifications were not easily transferable, so even if she wanted to continue teaching, she would have to take additional certification courses in England.

Luckily, Kelly had saved for her graduate degree in a 529 account, so she could use the funds at any accredited university in the world. She decided to forgo the additional teachers' certification courses and apply to business schools instead. Kelly is now pursuing her MBA at the London Business School-one of the top three MBA programs in the world(2)-and using her 529 plan assets to pay for her tuition and related expenses.

In today's rapidly globalizing economy, Kelly's situation is not unique. Each year, thousands of American students either participate in study abroad programs, or enroll full-time in colleges and universities outside of the United States. In fact, according to a recent poll of college-bound students, 55 percent indicated that they are certain or fairly certain they will participate in a study abroad program, and another 26 percent indicated a strong desire to study abroad.(3)

In response to the high demand, many higher education institutions now offer a number of international learning programs, ranging from semesters at sea to cultural immersion and multi-city programs. However, despite the myriad of international programs available, many students (38 percent) still cite high costs as the top reason for lack of participation in study abroad programs.(4) In addition, using financial aid for international studies presents its own challenges: additional eligibility requirements-residency, grades, credit hours, and age, to name a few-must be met, and foreign and US semester schedules differ which can delay loans and other federal aid.

Still, there are options for those who want to finance an education abroad, including 529 College Savings Plans. The plans allow tax-free accumulation of assets and federal tax-free withdrawals for qualified higher education expenses, and the features (flexibility, control, and multiple investment options) which make 529 plans attractive for funding stateside education are also available when the plans are used with accredited foreign institutions.(5)

How It Works

Over 4005 foreign higher education institutions are eligible under the rules permitting federal tax-free withdrawals from a 529 plan. A list of eligible foreign institutions is available in the Federal School Code Lookup database on the Free Application for Federal Student Aid (FAFSA) website.

"The test for any particular school's inclusion is its eligibility to participate in Title IV federal financial aid programs," says Joseph Hurley, founder of SavingforCollege.com. "Most degree-granting four-year schools, junior and community colleges, and graduate schools will qualify, as will many proprietary and vocational schools."

Is A 529 Plan Right For You?

A 529 savings plan is one of the best tax-advantaged ways to save for higher education-whether you plan to study in the US or abroad. Most plans offer several asset allocation options, and also allow you to contribute via lump sum or through a systematic investment plan such as a payroll deduction. You should consider investing in a 529 plan if you are:

• A parent concerned about the rising costs of college, 

• A grandparent who wants to help save for your grandchildren's future education expenses 

• A retiree who would like to develop an existing hobby into a serious, full-time interest 

• An "Empty Nester" who is still active in the workforce, but needs to return to school to remain competitive 

• A professional who is considering going back to school to pursue a second degree, change careers, or to enhance your professional skills 

• An adult who wants to help a child in your life- a niece, nephew, or godchild-save for future college expenses

As more higher education institutions implement international programs to address the growing demand, opportunities to study abroad are more available than they were twenty years ago. If you already have an education plan, consider whether studying abroad is an option you'd like to pursue in the future. If you need help developing an education plan, a Financial Advisor can help you get started, and can even customize a proposal based on projected costs at the schools you're considering.

Whether you plan to study stateside or beyond the country's borders, one thing is certain: college costs are on the rise, so it's important to start early. The world is your oyster; take advantage of all it has to offer.

(1) This name is a pseudonym. Name similarities to any individual living or deceased are purely coincidental. 

(2) Source: 2008 Global MBA Rankings, Financial Times 

(3) College-Bound Students' Interests in Study Abroad and Other International Learning Activities, CollegeBoard.com, January 2008 

(4) Assets must be used for qualified higher education expenses. However the pursuit of a degree is not a prerequisite for tax-free qualifying withdrawals. Transportation costs are not considered a qualified expense. 

(5) Search results as of August 15, 2008. Refer to Searching for Eligible Foreign Institutions in this article for search methodology.

8 Ways to Pay Off Student Loans Debt

8 Ways to Pay Off Student Loans Debt  

A recent study by the National Center for Education Statistics shows that 50% of recent college graduate have student loans, with an average student loan debt of $10,000. The average cost of college increases at twice the rate of inflation. With the rising costs of college it is difficult for aspiring colleges students to get enough scholarships and grants to pay for college and basic necessities. More and more college students are forced to use credit cards to pay for basic essentials such as books and school supplies. According to the United Marketing Service (UCMS) the average number of credit cards per student is 2.8. 

Here are 8 ways to help with paying off student loan debt:

1. Develop a plan. Develop a plan to pay off your student loan debt before you graduate. 
2. Save your money. Each summer throughout your college education, get a job or internship. Save half the money in a high interest savings account such as www.emigrantdirect.com (5.05%) or www.ing.com (4.5%). After a few months, consult a financial advisor to earn the highest possible return on your money. After college, you can use the money saved during all 4 years to pay down your college debt. 
3. Use caution with consolidation. Consolidating student loans combines your loans into one payment but may or may not provide you with a lower interest rate. Do extensive research before consolidating your student loans. In addition, you may not be eligible for various student loan forgiveness programs if you consolidate your student loans. 
4. Exchange work to reduce debt. Perform volunteer work or work for the following in exchange for reducing student loan debt: teaching in certain locations with low-income students or areas with shortage of teachers, providing legal and medical services in low-income areas or working for Americorps or the Peace Corps. 
5. Get a work-study job. To help pay for the costs of college get a work-study job on campus to help defray the cost of college. Go to your campus employee office to ask about their work-study program. Work study Jobs pay at least the minimum wage for that state. 
6. Apply for lots of scholarships. In recent years, money has been reduced from the budget for college scholarships so it is harder to get a scholarship to go to college. You can increase your changes of getting a scholarship by completing as many scholarship applications as you can. If you complete at least 50 you should receive at least 5 scholarships. Also, go to your campus financial aid office and ask about financial aid programs that the schools provides to students. Become friendly with the financial aid office employees who will alert you to financial aid programs when they become available. You can also search the internet for scholarships. Some scholarship websites are www.fastweb.com, www.scholarships.com, www.finaid.org, www.college-scholarships.com or www.scholarshiphelp.org. 
7. Apply for grants. Apply for as many grants and scholarships as possible. You can also apply for federal grants such as the Federal Pell Grant (Pell Grant), the Federal Supplemental Educational Opportunity Grant (FSEOG) Program, Leveraging Educational Assistance Partnership (LEAP), and National Science Scholars Program. Some grant websites are www.scholarships-ar-us.org/grants/, www.scholarships-ar-us.org/grants/women.htm, www.careersandcolleges.com. 
8. Protect your credit. Try to avoid making late payments on your student loans, if you do this will be reported on your credit report and can remain for up to seven years. If you are having financial hardship call the student loan company and inform them of your situation, ask for a hardship or loan deferment to ensure your credit is not damaged until you are able to start making payments again.

6 Tips For Efficient Student Loan Management

6 Tips For Efficient Student Loan Management  

Higher education entails availing student loans and these are not clubbed as “bad” loans by management gurus. However every student needs to plan finances such that they get out of debt as soon as possible. The planning of a achievable repayment schedule should be the primary aim, this will lay the foundation to a strong unshakeable financial future.

Financial planning is the cornerstone to a safe future. So, read up on organizing your finances and create a workable plan. The internet is a wonderful resource for planning tips and will be the ideal place to begin.

1. Create a record of your loan liability. File all documents carefully and make a note of what you have agreed to: interest rates, payment schedule and so on. Create an easy to use record on your computer. File details of your loan applications, promissory notes, disbursement and disclosure statements and loan transfer notices.

2. Plan your expenditure carefully. Sit down and determine how much money you need for day-to-day expenses. Try and minimize expenses and avoid borrowing while a student. Even if you do use a credit card make sure you are able to pay the bill in full when it is due.

3. Learn how to curtail expenses. Share living expenses and food costs with another student, minimize eating out, and learn how to cook quick nutritious meals, wash your own clothes. Minimize clothing expenses by learning to mix-n-match clothes.

4. Get part time work to meet your money needs. Try and save a portion of your earnings to tide over hard times.

5. Study hard and win prizes and scholarships that will reduce tuition fees or gain you credits.

6. Request family members to give you gifts as cash instead of kind for birthdays and festivals. This will help you meet your expenses instead of owning many watches or sweaters.

It is when you are a student that you need to learn the importance of credit reports and scores. It is important to begin building a “shinning” credit report and score from when young. You must ensure:

• That the monthly payments are paid on time every time.
• You try are minimize costs by paying a higher monthly installment.
• Use the deferment and forebearance options only when you need them.
• That you consider loan consolidation only as a last resort.
• You inform the lender whenever you change your address or job.
• That you check all statements concerning your loan carefully and bring any discrepancies to the attention of the lender immediately.
• You inform the lender if for some unavoidable reason your payment is delayed or about to be defaulted. Be professional always and keep the bank or financial institution in the know.

Student loans can be managed efficiently if you: borrow only what you need; you do not use the loan to lead a “high” life but to educate yourself; and you learn the art of controlling your expenses.

Life must be lived to the fullest and free of debt to be fulfilled.

5 Things to Know Before you Consolidate Your Student Loan

5 Things to Know Before you Consolidate Your Student Loan  

Student loan consolidation has great benefits, but it often looks like a complicated process and scares people. There is nothing to be afraid of, it is actually much simpler that you think, but to get the most of your consolidation loan you need to know several important things.

1. How to find the best student consolidation loan rate?

According to FFELP (Federal Family Education Loan Program) guideline lenders calculate your rate as an average of your existing loans' rates. They are not allowed to offer you a lower rate and compete for that. So there is really no point to searching for a lender with the lowest rate.

However, many lenders offer great rate reduction discounts. Usually you get a discount after making several payments on time or if you set an automatic payment from your bank account. When using online calculator, most lenders give you your rate after the discounts. So you will have to be careful and read all conditions of your new loan to make sure that you are eligible for the benefits.

2. How many times can I consolidate?

Usually you can only consolidate your loans once. That's why it is important to do your home work and select the right lender the first time. There are two circumstances when you can reconsolidate your loan. First, if you decide to study more and take additional loans. Second, if consolidating the first time not all your previous loans have been captured. This is theoretically possible, but in practice happens very rarely. Debt consolidating companies are usually pretty good about including all your outstanding loans in a new loan.

3. What repayment plan to choose?

Most companies offer at least two repayment plans - standard and graduate. They may be called differently by different lenders, but the general idea is the same. The standard plan is the most simple - your monthly payments are the same for the life of your loan. With this plan you usually pay the least amount of interest.

Graduate plan supposes that at first your monthly payment is lower; it can be low for 12 or 24 month. But your later payments are higher. This plan is perfect for graduates who are not sure of finding well paid work straight after graduation or if you expect other major expenses, like having a baby. By choosing a graduate plan you will pay more interest that on standard repayment plan, but the difference is usually not all that much.

There also might be other plans that allow you to make lower monthly payments, but you will have to pay off your loan longer. These plans are usually the most costly, because you end up paying much more interest.

4. Does bad credit affect student debt consolidation?

If you have federal student loans and go for a federal loan consolidation program, your credit history doesn't matter. With private lenders it would be more difficult to get approved if you have a bad credit. So if you have federal and private loans, consolidate federal loans first, this will improve your credit score. If you don't have any federal loans, take steps to improve your credit. The easies way is to get a credit card and pay it on time fore several months.

5. How to chose the best loan consolidation company?

As you already know, lenders can't really offer your lower rates than others. So it makes sense to look for a lender that offers the most benefits in rate reduction. Other points to keep in mind are: if there are any additional fees for consolidation and if deferment option is available. When you go for a federal loan consolidation, there are several circumstances when your payments can be deferred, such as financial hardship, illness or unemployment. If you are going for a privet lender for your student loan consolidation, it is important that this lender offers deferment option as well.

Also bear in mind, that you can't always choose the company to consolidate your student loans. If your took all your loans from the same company, you can only consolidate with that same lender. However, if you have loans by different lenders you are free to choose from any lender approved by US government.

5 Questions To Ask Yourself Before Getting A Student Loan

5 Questions To Ask Yourself Before Getting A Student Loan  

With the rising cost of education nowadays, student loans is one of the best ways to pursue your tertiary education since many students cannot afford to pay the education fees. However, before taking the plunge and taking up a student loan, you need to ask yourself the following questions to decide the type of student loan that you need.

The Types Of Student Loans

There are 2 main categories of student loans currently available. Government student loans which are loans carried out by the government and private student loans which are provided by the private sector. There are pros and cons to each but generally government student loans have lower interest rates, are quite easy to get approved since they do not take into account of your credit history.

For private student loans, the interest rates are usually higher but they allow greater flexibility when repaying the student loans.

Student Loan Amount

Generally speaking, government student loans are usually fixed amounts depending on your education level. For private student loans, the amount that can be loan is more varied and depending a lot on your credit history and the repayment plan.

It is recommended to borrow only the amount of money you need for your education. To do that, you need to estimate how much you will need during the course of your studies. You will need to factor in expenses such as accommodation, living expenses, school/textbooks fees and other miscellaneous expenses.

The Period Of Student Loan

Both government and private student loans provide loans which can last anywhere from 1 year to 20 years. For longer loan periods, you need to factor in the interest rates since you can end up paying a lot for interest and every little for your principal student loan amount.

You need to determine how much you can pay per month after you graduate and have a buffer of at least 3 to 6 months in the event you are jobless.

Other Outstanding Loans

If you have other outstanding loans as well, you might want to consider consolidating the loans before getting another student loan.

Without proper discipline and control, repaying multiple loans can be a huge financial strain. It is better to clear all your outstanding loans before getting a student loan. You can get better interest rates for your student loans as well since you have better credit score.

Interest Rate

The interest rates will vary from lender to lender. Government student loan interest rates are usually fixed and pretty low. Private student loans interest rates varies depending on the type of payment plan you choose.

If you just want to repay a fixed amount per month without worrying about interest rates, it is best to get a government student loan with fixed interest. That way, it is easier to plan your financial budget.

3 Benefits of Student Loan Consolidation

3 Benefits of Student Loan Consolidation 

Sometimes people think that loan consolidation is too much of a hard work, so they leave all their loans as is and try to cope with all payments. In reality, consolidating your outstanding student loans is not at all hard. All it takes is a bit of careful research, to find the lender that will help you save the most. And the benefits of consolidating your college debt are significant. Consolidating can save you several hundred dollars. Find out how to get the most benefits of your student loan consolidation.

Benefit 1: Less hassle

How many bills do you have to pay every month? How many of them are from different lenders for your student loans? If you are like most people you probably hate keeping track of all bills and payments that tend to arrive at a different time during the month. Consolidation will solve this problem - you will have to make one payment every month, that's it. No more forgotten student loan bills and trying to remember what you paid or haven't paid yet.

Benefit 2: Your will pay less

Even though your consolidated rate is calculated as an average of your existing loan rates, the resulting rate is usually slightly less. So your monthly payment will be lower.

Often students and young graduates try to compare several lenders in hope of finding the lowest consolidation rate. There is no reason to do so. According to the law all lenders have to offer you the same interest rate as Federal Family Education Loan Program. However, most lenders offer additional benefits and that's where you savings will really come from.

Majority of lenders reward you with reduction of interest for setting a direct bank withdrawal. Paying on time is also very important - usually you can get a reduction up to 1 percent on your interest rate for paying before the due date for 24 or 36 month. So, for example, if your current average interest is 7.5 percent, after all discounts it will be 6.25 percent. Considering that you will repay your loan for several years this will account to a substantial savings.

Benefit 3: Better credit history

When you pay several loans it is inevitable that from time to time you miss some of the payments. This can lead to damaging your credit history. And as you know, if you have bad credit, it will be difficult to get new credit cards and a mortgage when you decide to get your own home. On the other hand, consolidating all your loans and paying one bill on time every month will help you built a strong credit history.

So, there is really no reason not to consolidate. The only thing you will have to keep in mind is that you will have to choose the lender for your consolidated loan very carefully. As a general rule consolidating college loans is only allowed once. There are only two exceptions - if you decide to continue your study and take another loan and if not all your student debt was included in the first consolidation.

So usually you can't "reconsolidate" if you see a better offer later. For this reason you will have to look at the fine print so there are no surprises later. For example some lenders offer attractive benefits, but they have additional fees or their fees for late payment are enormous. You will have to find all this out before you commit to a particular lender.

Compare Student Loan Consolidation Rates In Choosing A Lender

Compare Student Loan Consolidation Rates In Choosing A Lender

One of the most important thing to consider in choosing a lender is to compare student loan consolidation rates.  Most students who've graduated find it wise to consolidate student loans upon graduation.  The next crucial step would have to be choosing the right lender from which to apply a student loan consolidation from.  Nowadays, there are many lenders that offer you different loan consolidation programs, each with various requirements, interest rates, and etc.

This article will give you some points to consider in selecting a lender.  Although it is very important for you to compare student loan consolidation rates, you should also take into account some details in choosing a loan consolidation program and a lender.

Comparing School Loan Consolidation Rates

You could cut your student loan payments by up to 50% or more if you consolidate your student loans.  This could mean big savings and thousands of dollars on the life of your loan.  You could also be able to lock down a low and fixed interest rate for your monthly payments.

Ask about the rates.  When choosing a lender, you should ask them about the rates that they can give you.  Usually, the interest rate on a consolidation loan is calculated by getting the weighted average of the interest rates (as of the date the application is received by the lender) on all the loans you are consolidating, rounded up to the nearest one-eight of a percent.

Other Things to Consider

Of course, there are other things to look into.  It will also be wise if you ask your lender to figure out your monthly payments and how long it would take for you to fully pay the total loan balance.  Also, you should try asking about incentives, like additional breaks on interest if you make your payments through automatic debits each month or if you consistently make on-time payments for a specific period of time.

Requirements

Lenders may ask for different requirements.  There are some lenders that will require you to have a co-signor, some optional, and some do not require this at all.  In lending companies that posts this as optional, having a co-signor with a good credit background will let you enjoy some benefits like lower interest rates.

There are some lenders who will ask for collateral, while there are others who don't.  Some lenders also set a minimum balance policy, and the amount varies from one lender to another.

Application

Easy application process is also one thing to look for in a lender.  Now, there are some lenders that provide online application that can be accomplished in just a matter of minutes.  The process is quick and all information released is kept confidential.  After 15 minutes of submission, you will be immediately called by a customer service representative on the contact number that you provided.

Service

In the end, it's also about service.  If you're comfortable and satisfied with your current lender's service, then you can just check with them to see if they offer loan consolidation.  Either that, or you can check your school's financial aid offices for a list of preferred lenders who have provided tried-and-true working experience to former students.

These are just some things to consider.  So if you are choosing a lender, compare student loan consolidation rates and other details.

Compare Student Loan Consolidation: Most Important Step Every Student Should Take

Compare Student Loan Consolidation

You won't be in this situation if you do not have the desire to be competitive in the job market these days. Everyone is aware on how important it is to be well-trained and you can only achieve this if you go through college. It is not surprising that in the process of wanting to achieve this goal, you have incurred for yourself multiple student loans which can either be federal student loans, private student loans or both.

All student debts come with a grace period after graduation. However, these days most students find it difficult to look for a stable and well-paying job that will enable them to pay the various loans taken. The problem starts when the time comes for them to pay these loans. What should the student doall Some would recommend student loan consolidation. Nevertheless before any decision has to be made, it is vital to compare existing facts to gauge if this is the best option to take.

When consolidating your loans, you need to segregate federal loans from the private ones. The moment you include these two types of loans together, they will all be considered and subjected to the terms and conditions that come with a private loan consolidation. Everything, especially the interest rates, will be based on the terms and conditions of the private lender unlike the federal loan wherein it is controlled by the government.

Consider these facts before making any decision whether to consolidate or not:

1. The act of combining all your government student loans into one will spare you the worries on how to pay your bills each month.

2. You can extend the prepayment period up to 30 years. Taking advantage of a longer prepayment term will definitely lower down your monthly payments.

3. However, when you take on a much longer repayment period, you will be paying a lot more interest charges in the long run.

4. Once you consolidate your loans, you will be getting a fix interest rate. This rate will not be affected if or when there is an increase of interest rate depending on the current market trend. The only setback would be in case the interest rate drops considerably.

5. When applying for student loans, there are lenders who offer benefits and discounts to the borrower especially if he or she has maintained a good credit standing. The moment you decide to consolidate, you may have to let go of these rebates and benefits.

6. There is no pre-termination fee in case you want to pay off your loan in advance.

With this information, the question now would be whether it is best to consolidate your loans or not. Gathering more information before you make a decision is vital since you can only consolidate your loans once. If you are struggling financially in paying your loans right now, this might be the best solution to your problems.