Friday, 29 July 2011

Federal Student Loans: Get The Facts Behind These Loans

Federal student loans: Be in the Know

Federal student loans are responsible for a lot of students actually getting to college, being more than enough to satisfy their costs and a little more. When it comes to repaying them, you'll need to keep a couple of things close at heart. They'll make it a lot easier for you to go through the process, and more importantly, it'll keep you out of trouble. The penalties for not being on top of your federal student loans are dramatic, and at the very least, it can cause your credit score to plummet. So, to be sure that this doesn't happen to you, there are a couple of things that can really assist you, and while it may not help much in the actual repaying of the loans, it'll definitely make your life easier.

Know Everything about Your loans

Knowing just about everything that you can about your loans really goes a long way, as it helps you stay organized and can tell you who needs to be the highest priority. You should know the lender, the balance, and repayment status. It's also especially important to know whether or not there are loan forgiveness options, provided that you're working in a certain field. By knowing these things, you'll never be blindsided by fees or due dates, and you can take solace in the fact that you're being as responsible as you possibly can. That's ideal for anyone who is facing a good amount of federal student loan debt, but it does require a bit more than just responsibility.

Know Your Grace Period

In addition to understanding how much and who you may owe the loan to, you'll also want to understand how much time you have before you pay it back. The grace period is vitally important for the student who just left school, as there's a chance that you don't have different companies banging down your door offering a job. At any rate, federal student loans have different grace periods. For example, the Stafford allows the graduate 6 months, while the Perkins allows for 9. As you'd expect, it varies for private loans and federal PLUS loans, but are usually based on when you take it out. Considering the importance of the grace period, you'll obviously want to understand exactly what it is before you even take one out. If not, there's the probability that you may be entering a contract that may be hard to honor.

Sunday, 10 July 2011

Student Loan Consolidation - A Way to Save Money

So you have a great need to use every penny as smart as possible, i.e. to get the biggest benefit from every dollar. If you have several student loans, both the private and federal ones, you can save money with a simple student loan consolidation, even hundreds a month!

1. The student loan consolidation Can Be Done For Private And Federal student loans.

Student loan consolidation can be done for both the private and federal loans. The consolidation is a great tool for simplifying the monthly bills providing an immediate payment relief and the long term benefits. However, it is important to note, that the federal loans must be consolidated as one separate group and so must the private debts too. You cannot mixed them.

As to the federal loans, which you can consolidate only once, the interest rate will be fixed during the rest life of the loan. When you can do the consolidation during the grace period, it is the deal with the fortune, which interest rate you will get. You do not have to go through the credit check and there is no application fees

2. The Debt Refinancing.

If in your case you have just graduated and got the work, your credit score may have improved compared your student times. Now when you will do the consolidation, you will refinance the interest rate and the repayment time. This process is the most effective thinking the cost savings.

3. Consolidate During The Grace Period, You Can Reduce The Interest Rate By 0,6 %

When you consolidate during the grace period, within 6 months after the graduation, you can save in the interest rates by 0.6 %. During the times, when the interest rates are historically on a low level, just by renegotiating the interest rate can bring the much needed help.

4. How Much Are The Savings?

The ideal situation would be the one, when the interest rates are historically low. Then by consolidating and refinancing the whole debt package, you can get the maximum saving. To take examples, if your student loan is $ 10.000 and you extend the repayment time from 15 years to 25 years, you can save over $ 230 a year. With the $ 100.000 debt the saving is over $ 2.400 a year without the interest rate changes.

5. Start To Calculate The Benefits From The Present loans consolidation.

When you think the student loan consolidation rates, you have to take into account two things: your present loan terms consolidation rate and the future rates after your student loan possible refinancing. It can happen, that only the new interest rate brings the saving you need and there is no need to extend the repayment time.

However, remember that you can consolidate the debts only once. This means, that it may be wise to plan your monthly payments so, that your monthly expenses will be on the lowest possible level. This is a careful plan and will help you, if you will meet sudden changes with the incomes or living costs.