Applying For Student Loan In 2010 - What You Should Remember?

Author: Sally Croft

A student or education loan is a form of financial aid that must be repaid with interest as opposed to scholarships which do not need to be repaid. If you are unable to get a financial aid, scholarship or money from family members, the next resort is applying for a student loan. Although student loans can be a reasonable way to finance an education if not carefully planned student loans can be a disaster. Obtaining student loans are sometimes easy however maintaining them are a different story. Below are some of the things you should remember when applying for your 2010 student loan.

Plan Ahead:

Planning is the key to not being overburdened by student loans. By researching for the best interest rates, maximizing your Perkins loan availability and cutting expenses you should be able to manage the major expense of student loans.

Research:

Never apply for any loan without proper research. When you’re trying to figure out which student loan are right for you, there’s a lot of information to digest. Understanding the details may help you make an informed financial decision.

Shop Around:

Simply because the college or university gives you the loan application does not mean that the loan is the best deal in town. Make sure you have fully examine other options for aid. The school may give you an application for loans with interest rates between 8 and 10 percent. However, if you research lenders you may find loans that have interest rates as low as 6 percent.

Timely Submission:

Provide all requested documentation in a timely manner. Fill in all applicable areas of the application and sign and date where indicated. Missing information and or signatures can delay processing of your loan.

Keep All Open Credit Current:

Pay all current credit cards on time during your application process. This includes any mortgage, rent, car payments, student credit cards and utilities. Do not miss a payment of send in your payment pass the due date. This is critical to a successful closing of your student loan.

Do Not Make Any Major Credit Purchases:

Do not make any major purchases during the loan process. Increasing your debt can change your credit score and possible cancel, suspend or change your loan of terms among others.

Limit Credit Inquiries:

Do not incur any non-essential inquires to your credit report until after the loan process has completed.

Accrue Interest Loans:

Never take our private loans or cash advances from credit cards, lines of credit, or equity loans to pay for tuition. Private loans, such as personal loans, begin to accrue interest the moment you or your school cashes the check, whereas subsidized Stafford loans do not accrue interest until 6 months after you graduate.

Collateral Student Loans:

Many people take out equity loans on their homes, cars and other property to finance their education. However, equity loan is a secured loan and if for any reason you cannot meet the payments you risk losing your home or the property that you used as collateral to receive the loan.

Only Borrow What You Need:

Many people make the mistake of borrowing more than they need. But keep in mind that you will have to pay this money back and the more you borrow the more interest you will have to pay back, so only borrow what you need.

Tags: Perkins loan, Private Student Loans, scholarships, Stafford Loans, student loan
Posted in Private Student Loan, Scholarship, Student Loan | 2 Comments »

Dec

What Different Types of Student Loan are Available?

Author: Sally Croft

The pursuit of higher education is not cheap. Many students must seek help in the form of student loans after exhausting all avenues for gift aid to help finance their tuition and fees. Student loans come in many forms and are offered by both public and private lending institutions. Of course, most students will gravitate towards state funded student loans as they offer more flexible repayment conditions and also qualifies graduates to get debt forgiveness under several volunteer schemes.

Public Loan Programs

Stafford Loans: Stafford loans are the most popular type of public student loans offered to students. These loans come in both subsidized and unsubsidized formats. This means you can access Stafford student loans even if you do not have financial need for assistance in paying your tuition fees. The amount of the loan depends on your field of study as well as the number of years required to complete your studies. Students who opt for Stafford loans are guaranteed one low interest rate for the entire life span of their loan and have up to six months after their graduation as a grace period before they start repayment. One major plus with Stafford student loans is that they are not tied to credit approvals.
Perkins Loans: Perkins student loans target only student with extraordinary financial need. Not all students will qualify for Perkins loans as they have to prove their need before approval is granted. These loans are offered for education at both the graduate and undergraduate level. Although Perkins loans have lower annual and lifetime borrowing limits, they have significantly more flexible borrowing terms, lower interest rates and are free of origination fees. Interestingly, the government pays interest rates on these Perkins loans while the student is still enrolled in school.
PLUS Loans: Plus loans are a supplement to the regular student loans. Both students and parents can access PLUS loans to fund whatever costs are not covered by the regular student loans. This allows them to have funding to pay all their higher education fees with minimal funds coming from their pockets. The catch to PLUS loans is that repayment begins a mere 60 days after disbursement and attract an interest rate ranging from 7.9 to 8.5 %. Qualification also requires a good credit record and the repayment options are quite limited.

Private Loan Programs

Generally, students are advised to access private student loans only if they have exhausted the federal student loan system. The fees charged by some private student loan providers are much higher than under the federal system. Some may advertise a zero fee service but ultimately roll these fees into the overall interest rate associated with the loan. Students who opt for private student loan funding are attracted by the ability to consolidate and reschedule their loans. Although they may achieve less monthly payments in the short run, they ultimately pay more interest rates on the same principal over the extended period of the loan service.

Tags: Perkins Student Loans, PLUS Loans, Private Student Loan, Stafford Loans, student loan, Student Loan Types
Posted in Private Student Loan, Student Loan | 3 Comments »

Nov

Counseling for First Time Student Loan Takers - An Aid for many!

Author: Sally Croft

Having read through a number of case studies about student loan programs and the problem faced by students due lack of awareness, all that I could conclude is that availing student loan is an art and a small amount of luck is also needed in order ensure things happen in a particular order making life easier for the borrower.

Counseling for First Time Student Loan Takers

Student loan program is a topic of which not many students are expected to know before they actually get into one. And as far as elders are concerned, their knowledge about handling student loans are limited to just signing the papers and repaying them till the date they get their pension. In order to ensure students are in the right track of doing things it is important they get a proper counseling about Student Loan Programs and the pros and cons of availing a student loan.

Inspite of various requests put forth to relevant authorities and steps taken by them to include the awareness about student loan programs in their syllabus, no great change is really seen as far the effectiveness of these changes are concerned. Hence an effort has been put forth to list the various aspects of student loan programs.

Let us discuss student loan programs and the way you will proceed adopting them.

Learn about Student Loans - Undertake the effort to learn about student loan options carefully. Take note of the various hints and suggestions offered to you during your counseling session and make note of the terminologies and suggestions used. Many websites are as well offering the meanings of various terminologies namely www.finaid.org/loansand www.studentaid.ed.gov
Parental Help - Take your parents help and support while dealing with student loan options. Their help and contribution will surely help you get better deals and as well identify the wrong ones. Inspite of the fact that you parents haven’t been to the college, remember they know finances better than you.
Keep Track – Not just borrowing, do keep track of all that you have borrowed and know your liabilities every now and then. It will not only help you assess your financial liability but also help you plan your payment routine
Friendship Works – If you have a buddy at any of the loan processing centres they are sure to help you find the right loan deal and also let you have an idea of the various options and their procedures. You can be rest assured you have not missed the bus as far as availing the right loan option is concerned.
Low Cost Loans – If you have an eye for detail keep checking the loan rates and you will be surprised to find that every year the loan rates keep reducing considerably and wait for your chance to switch to a low interest rate scheme
Private Lending – Private lending is not doubt one of the most flourishing businesses, hence be careful before taking the private students loan. Ensure you have properly verified about the lender and compared the various loan prices before you have zeroed upon a single loan option. There are many unscrupulous lenders whose main aim is to loot money, hence stay careful from illegitimate lending activities.

Hundred advices may be offered, but what really helps is your understanding and careful assessment of your student loan option. Hence, make sure you take an informed decision about all your loan related issues.

Tags: Interest Rate Scheme, Low Cost Loans, Private Lending, Student Loan Programs, Student Loan Takers
Posted in Private Student Loan | No Comments »