Student loan consolidation is a great idea when used correctly and can help a student or a graduate out of a tough financial spot, however, they are not as financially beneficial as they first seem!
Pretty much all student loans are variable loans and as a result repayments can vary often, consolidating student debt is a good way to obtain a ixed rate and is especially beneficial when interest rates are low as they are presently.
Student loan consolidation is generally only available to those students who have a good repayment history having always paid their student loans on time. However, should your repayment history be anything else but perfect it is not the end of the road as there are alternatives that can be looked into, standard debt consolidation loans and debt management plans to name a couple, so don't give up hope.
The rates applied to consolidation loans are generally 1-2% lower than those applied to the student loans they are replacing which doesn't sound a massive saving but it will save you in the region of 50 to 60% on repayments. This may sound like good business, and in the short term it probably is, but in order to lower the repayments to this level an interest rate of 1 or 2% less just wouldn't cut it so what actually happens is that the term of your loan is extended.
This is a problem with consolidation loans that many choose to ignore as they prefer to see the immediate monthly savings rather than the amount that will eventually be repaid. For example, instead of having several, smaller, student loans each of 5 years repayment term, a consolidation of those same loans would decrease monthly payments massively but the the term of the loan could be extended up to as much as 20 years!
A good way to utilize a student loan consolidation loan is to consolidate all loans to benefit from the lower interest rate but make the same repayments as were being made prior to consolidation and by doing this any debt will be cleared much sooner.
Even if the consolidation was done because previous repayments were unaffordable there will be a time when you wil be able to increase repayments so plan ahead and make a strategy to clear your student debt.
Your goal should always be to clear your student debt as soon as possible, in fact this applies to any debt you may have, and do so without sacrificing the cost of having a life too much. It is always beneficial to seek out and utilize methods of debt elimination that can give you the financial freedom you deserve.
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Monday, September 28, 2009
Monday, August 10, 2009
Student debt grows as tuition increases
As universities struggle to keep tuition affordable and academic programs running, students struggle to afford the cost.And as tuition goes up, so does debt.
Clemson University increased tuition 4.5 percent for in-state students and 7.5 percent for out-of-state students Thursday as it grappled with a loss of $45.7 million in state and endowment funds. Also, the university cut 452 positions to help offset its budget loss.
The university's board of trustees adopted a strategic plan after months of trying to find methods of keeping tuition hikes reasonable for students while maintaining the quality of academic programs, Clemson President James Barker said.
The increased tuition — $234 more a semester for in-state students — will offset about a third of the lost funding, the school said. Total tuition for residents will be $11,576 a year, while non-residents will pay $25,886.
Abby Daniel, undergraduate student body president, said students “appreciate that the (tuition) number has been kept as low as it has.” She said she also is pleased that students next year won't have to worry about classes being cut or teachers being gone.
Russ Williams, a Greenville resident and a senior in mechanical engineering, said, “Fortunately it's just a single-digit increase. That's a month of rent.”
He said the increase wasn't a huge deal, and “I won't stress over it.”
He pays for his tuition with two scholarships, including the Life Scholarship, with an engineering bonus, and a pre-paid college fund, which ran out in two years.
Courtney Dixon, a sophomore from Lexington, said she is lucky to have scholarships and student grants, but she also needs student loans as well as her parents' help to have money for college.
“A tuition increase is not something to be happy about,” she said, especially with the weak economy.
Source
Clemson University increased tuition 4.5 percent for in-state students and 7.5 percent for out-of-state students Thursday as it grappled with a loss of $45.7 million in state and endowment funds. Also, the university cut 452 positions to help offset its budget loss.
The university's board of trustees adopted a strategic plan after months of trying to find methods of keeping tuition hikes reasonable for students while maintaining the quality of academic programs, Clemson President James Barker said.
The increased tuition — $234 more a semester for in-state students — will offset about a third of the lost funding, the school said. Total tuition for residents will be $11,576 a year, while non-residents will pay $25,886.
Abby Daniel, undergraduate student body president, said students “appreciate that the (tuition) number has been kept as low as it has.” She said she also is pleased that students next year won't have to worry about classes being cut or teachers being gone.
Russ Williams, a Greenville resident and a senior in mechanical engineering, said, “Fortunately it's just a single-digit increase. That's a month of rent.”
He said the increase wasn't a huge deal, and “I won't stress over it.”
He pays for his tuition with two scholarships, including the Life Scholarship, with an engineering bonus, and a pre-paid college fund, which ran out in two years.
Courtney Dixon, a sophomore from Lexington, said she is lucky to have scholarships and student grants, but she also needs student loans as well as her parents' help to have money for college.
“A tuition increase is not something to be happy about,” she said, especially with the weak economy.
Source
Monday, July 20, 2009
Private Student Loan Consolidation, Is There A Best One?
Private student loan consolidation cannot be generally mixed with federal student loans due to the low interest rate on the latter. However, there are several options open to refinance the private student loans by replacing them with another.
The main advantage of doing this is that instead of making several monthly payments, only a single payment is made every month that may be reduced although this will cost one in terms of higher interest amount paid because the single loan may be for a longer period of time.
This type of loan also incurs the same interest that the home equity loan has. You can have a home equity loan at a fixed rate, thus locking in the low interest rate. However sometimes a variable rate looks attractive as long as you can watch it and lock it the moment it is on an upward trend.
Study carefully the terms of the agreement. Find out if the interest rate is variable or fixed. Ask also about fees and if there are prepayment penalties. Find out how much they are for each of the following lenders. Write them down so you can get the best deal from among the following list and whatever other companies willing to do the private student consolidation loan with you:
Key Education Consolidation Loan - $75,000 maximum for non-key debt, $7500 minimum, 10, 15, 30 year repayment term, no prepayment penalty and no fees
Citi Student Loans - $75,000 maximum, $7500 minimum, choose fixed or variable rate, up to 30 year term rate, rate reduction after 48 monthly on time payments, no prepayment penalty
Educated Borrower Private Consolidation Loan - $300,000 maximum, $7500 minimum, up to 30 year repayment term, no prepayment penalty and 0 to 5% origination fees
Sallie Mae Private Consolidation Loan - $275,000 maximum, $5000 minimum, 15 to 30 year repayment term, choose between fixed and variable rate, no prepayment penalty and no fees
SC Student Loan - PAL Consolidation Loan - $150,000 maximum, $5000 minimum, 10 to 30 year repayment term, choose between fixed and variable rate, no prepayment penalty and no fees
Next Student Private Consolidation Loan - $300,000 maximum, $7500 minimum, up to 30 year repayment term, no prepayment penalty and 0 to 5% origination fees
Make sure when you are considering to go this route that you clarify all the terms of the agreement as the above may have changed and that all are put in writing and signed by both parties. The best one is the one that fits your needs. There you have some of the possible lenders and the other options when considering to do the private student loan consolidation.
Source
The main advantage of doing this is that instead of making several monthly payments, only a single payment is made every month that may be reduced although this will cost one in terms of higher interest amount paid because the single loan may be for a longer period of time.
There is a way to secure a lower interest rate. The private student loan is based on the credit score. If the credit score has improved by 50 to 100 points due to the fact that you have graduated and have a job, then you will be rewarded with a low interest rate.
Another way of getting a better deal when considering a private student loan consolidation is to talk to the holders of your debts. They may be willing to negotiate with you and cut down your interest rate so that they can keep you as their customer.This type of loan also incurs the same interest that the home equity loan has. You can have a home equity loan at a fixed rate, thus locking in the low interest rate. However sometimes a variable rate looks attractive as long as you can watch it and lock it the moment it is on an upward trend.
Study carefully the terms of the agreement. Find out if the interest rate is variable or fixed. Ask also about fees and if there are prepayment penalties. Find out how much they are for each of the following lenders. Write them down so you can get the best deal from among the following list and whatever other companies willing to do the private student consolidation loan with you:
Key Education Consolidation Loan - $75,000 maximum for non-key debt, $7500 minimum, 10, 15, 30 year repayment term, no prepayment penalty and no fees
Citi Student Loans - $75,000 maximum, $7500 minimum, choose fixed or variable rate, up to 30 year term rate, rate reduction after 48 monthly on time payments, no prepayment penalty
Educated Borrower Private Consolidation Loan - $300,000 maximum, $7500 minimum, up to 30 year repayment term, no prepayment penalty and 0 to 5% origination fees
Sallie Mae Private Consolidation Loan - $275,000 maximum, $5000 minimum, 15 to 30 year repayment term, choose between fixed and variable rate, no prepayment penalty and no fees
SC Student Loan - PAL Consolidation Loan - $150,000 maximum, $5000 minimum, 10 to 30 year repayment term, choose between fixed and variable rate, no prepayment penalty and no fees
Next Student Private Consolidation Loan - $300,000 maximum, $7500 minimum, up to 30 year repayment term, no prepayment penalty and 0 to 5% origination fees
Make sure when you are considering to go this route that you clarify all the terms of the agreement as the above may have changed and that all are put in writing and signed by both parties. The best one is the one that fits your needs. There you have some of the possible lenders and the other options when considering to do the private student loan consolidation.
Source
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