Many people consider an education to be the vehicle to the future – a way to fulfill their professional and personal dreams. Travel, family, owning property, wealth, opportunity and happiness seem more attainable with an education.
And yet, many students finish their education feeling cheated. They are left with a piece of paper, a massive job hunt and often more than $20,000 in debt. This can be discouraging. What many students don’t realize, however, is that they don’t have to be controlled by their student debt. In fact, they can control the purse strings.
Consolidating student loan debt is one way that many young people are using to take control of their financial future. They already have the education and now they need to move forward in a positive way.
Normally, with debt consolidation people are able to combine all of their debt, including credit cards, lines of credit and loans, into one big loan. This can result in lower interest rates and savings, as well as less stress and hassle.
With student loan debt consolidation, there are some added benefits:
1. While with most debt consolidation programs, a person is required to qualify based upon their credit rating, student debt consolidation programs don’t. So, even if you have a poor credit score, you are able to access the benefits of debt consolidation.
2. While some people may be restricted in terms of the amount they can receive in one loan to consolidate their debt, student loan debt consolidation typically has no maximum amount.
3. If money is ever tight, with student loan debt consolidation, people can postpone repayment until graduation or until they get a job.
4. With student loan debt consolidation, the debt is usually discharged at the death of all borrowers. So, you won’t be leaving an unnecessary burden behind on your co-signers or family members.
5. Everyone loves to save money on taxes and with student loan debt consolidation the interest you pay may be tax deductible.
So, if the amount you owe the bank for your education is getting out of hand or you’ve just graduated and you want to make repayment easier, a good student loan debt consolidation plan could be right for you. Check into local financial institutions and consider seeing a credit counselor to help you.
By: Kathy Burns-Millyard
Posts Tagged ‘Borrowers’
Student Loan Consolidation – Don’t Procrastinate
January 18th, 2010
Perhaps you were the student who waited until the last minute to cram for finals or routinely rolled out of bed five minutes before morning classes began. Procrastination is a common part of many students’ college experience. However, putting off consolidating your student loans and locking in the current interest rate won’t harm your grade point average, but it will affect your financial future. If you are thinking about student loan consolidation, you have until the deadline of June 30, to take advantage of the current low interest rates.
With interest rates expected to increase from 4.7% to 6.8% on July 1st, not consolidating your student loans could be a big mistake that will cost you thousands of dollars. For example, if you currently owe $30,000 in Federal Stafford Loans, monthly payments are $314. This amount can drop to $217 if you do a loan consolidation with the current interest rate. If you don’t meet the deadline, you will soon be paying $345 a month. Wouldn’t you prefer to be doing something else with $128 every month? As well, parents who are currently paying on PLUS loans should expect a hefty increase to what they are paying in interest if they don’t lock in the current rate before the deadline.
Besides the annual adjustment to the student loan interest rates, sweeping changes to the terms of financial aid are due to take affect on July 1st as part of the U.S. Congress’ Budget Reconciliation Act, and most of these changes will not benefit borrowers. Among the changes, students in school will not be able to consolidate their loans. As well, loan origination fees for students will be doubling, and the “in school” interest rate that currently gives students attending classes or in their grace period a discount of .6% will be discontinued.
Another reason not to delay in consolidating student loans is that there may not be an amnesty period for borrowers who fill out applications that aren’t processed by the deadline. Last year, a flood of applications were received the day before the rate hike went into affect, and the U.S. Department of Education generously offered amnesty for those who had submitted completed applications prior to the deadline. This year the Department of Education might not be so kind, and applicants who haven’t completed their consolidations before July 1st could be faced with having to pay the higher interest rate. Because student loan applications can take anywhere from one to 4 months to be processed, the time to submit an application is now.
The good news is that if you are considering a student loan debt consolidation, you still have enough time to complete the process and take advantage of the current interest rates and terms. It only takes a matter of minutes to fill out an application, and there is lots of help available. So, go ahead and get started, and pat yourself on the back for taking charge of your financial future.
By: Mike O'Brien
Consolidation Loans – Remove Your Debts and Start Afresh
January 15th, 2010
If it is time that you have been suffering from debts and want to repay them as soon as possible, then what you need is external sources of help which will assist you get rid of these debts. If such is the case with you, then consolidation loans are the best way to deal with your debts as you can repay them easily without any burden.
Through these loans, the borrowers can borrow money according to the amount that they owe to the creditors. The amount that is borrowed is used to repay off the debts unified in one go and all credits are removed from the borrower. Now, the borrower is only left with the consolidation loan to be repaid and that too is borrowed at a very low rate of interest.
The borrowers can take up these loans in the secured or the unsecured form. It depends upon the availability of assets with the borrower and their readiness to pledge them for money with the lender. Secured form of these loans can be borrowed at really low rates by pledging an asset with the lender. The amount can be borrowed up to £75000 and has to be repaid back to the lender in 5-25 years. Those borrowers who do not want to pledge assets can take up unsecured form of these loans which allows them to borrow up to £25000. This money has to be repaid in a term of 6 months to 10 years.
To get low rate deals, the borrowers can research for these loans through the online mode. The borrowers can get low rate deals due to the stiff competition that exists online. Comparison of loan quotes helps the borrowers in getting lower rates which help in saving their interest money as well.
Consolidation loans have a double benefit for the borrowers as they remove their debt misery as well as save money of the borrowers too. These loans are certainly a good solution for those suffering from debt problems.
By: Tom Darwin