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Jul
23

5 Best Reasons why you should monitor your Student Loan Debt

Author: Sally Croft

As an increasing number of college graduates are facing financial hardships, the government has created a variety of programs to help you manage your student loan debt- ranging from ways to lower your interest rate on federally insured money to federally mandated debt reduction and forgiveness programs. While you may not qualify for all of these programs there maybe something for you. However, you do need to keep track of your loan balance so that you will know which programs fit your unique situation; you qualify for and can participate in. In order to be a responsible borrower and to make your life much easier, you will need to monitor your student loan debt.

1. Update your budget:

Monitoring your Student loan debt and being aware of your total debt level helps you to update your budget based on your post-school life and current life. Doing this helps you to make responsible financial decisions. Take into account the following to know where you were, where you are and where you need to be:

  • Your salary
  • New expenses
  • Old expenses
  • Transportation
  • Student loan payments
  • Savings
Monitor your Student Loan Debt
2. Know your loan balance:

Keeping track of your student loan balance and making regular payments are the best way to ensure that you do not allow your debt to get unmanageable. Both while you are in school and after graduation. By being aware of your balance you are less likely to spend frivolously when you see your total balance increasing.

3. Lower interest rate:

If you become passive about your student loan, you will potentially pay more over the life of the loans than is necessary. Keeping track allows you to take advantage of shifts in interest rates and other available assistance programs. Being involved increases the chances that you will not miss chances to lower your interest rates.

4. Refinancing:

Student loan may be refinanced to take advantage of shifts in interest rates. Knowing your principal balance is the only way you will be able to accurately gauge which shifts are great opportunities to take advantage off and which are not. Guaranteed loans from the Government for example, tend to carry lower rates and offer fewer refinancing options. Private loans, on the other hand carry higher rates. It is important that you refinance your student loans when the time is appropriate because your saving can be significant.

5. Loan Consolidation:

If you have more than one student loan and is having trouble making your monthly payments, you should consider student loan consolidation. Take the advantage of consolidating your loans when the opportunity is available and also avail yourself to other money saving opportunities.

These are just a few reasons to monitor your student loan balance. Please share with us other reasons why a student should monitor their student loan debt.

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Posted in School Loan Debt, Student Loan | 1 Comment »

Apr
27

Student Loan Debt – 10 sure mistakes to avoid in 2010

Author: Sally Croft

Most students are not able to afford the heavy tuition costs due to low income and other financial factors. This can put students and parents into desperate situations thus making the wrong choices. For some, the lack of knowledge and desperation can lead to misjudgments when applying for a student loan.

Although looking for student loans can be time consuming and difficult task, it still requires that you enter into it with a certain amount of caution. To make this process easier I have listed a few tips to help you avoid making bad decisions and fall prey to some popular student loan gimmicks. However, there is really no need to panic, you will be able to find a legitimate student loan to pay for your education – just be careful!

1. Apply by Deadline Trap

Often times there may be a bold heading telling you to apply by this date or else…It is best to verify the deadline, because there may not be one and this is just a way to get you to apply right away before you have the time to research.

2. Telemarketing Calls

Unfortunately, telemarketing is everywhere and most of these offers can be tempting, but if it sounds too good to be true – it most definitely is, just politely say I am are not interested and hang up immediately.

3. Read the Fine Print

If you wear glasses make sure that you have them on when going over your application, especially the fine print. Most people tend to skim over the fine print thinking that it is not important, but I guarantee you the fine print is where all the most important details about your loan is hidden.

Student Loan Debt
4. Consolidate Loans – NO FEES!

This is a very popular eye-catching heading used by loan sharks, preying on the weak and desperate. Verify the information and get all the important details before agreeing to the loan.

5. Look Alike Logos and Seals

Lenders will do just about anything to look legitimate and as the real deal. However, this is just another trick to make you think that you are dealing with a reputable institution instead of the loan company by imitating seals and logos of colleges and universities.

6. Mail With Flashy Headings

One-time offer student loans, or best loan in town, just discard any piece of mail that has flashy headlines.

7. Email : One-Time up-front Loan Fee

Delete any e-mail offering you student loans for a one-time up-front fee. This could be a virus or company trying to obtain your identity.

8. Mail from The U.S. Department of Education

The U.S. Department of Education is not in the business of soliciting consumers to borrow money and does not send advertisements or mailers.

9. Adjustable Rate Loan

At first these loans sounds good and in the beginning the interest on the loan is very low, however over time the interest increases.

10. Student Loan Brokers

Charging you to apply for loans, pell-grants, financial aid and other service that is normally a free service or that you can do on your own.

As always, do your homework, be cautious before signing on the dotted line and if it sounds too good to be true – you best believe it is!

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Posted in School Loan Debt, Student Loan | 2 Comments »

Dec
14

Defaulting A Student Loan – Learn How to Avoid It

Author: Sally Croft

Unless you are looking to ruin your life forever, the thing you want to do is to avoid defaulting on your student loans. The question is why would you want to default on your student loan when there are other options? The following is information on the best solution for avoiding student loan default.

Should I Default On My Student Loan?

Bad idea! Don’t even think about it! Defaulting on your student loan is the scariest financial situation you could ever want to be in. It is worse than foreclosure and receiving that scary IRS letter. And if you think it can’t be that bad, think again! According to Mark Kantrowitz, the founder of FinAid.org, “If education debt is evil, then defaulting on your student loans is a one-way ticket to hell.” Borrowers who get into trouble Kantrowitz added “are stuck in an oppressive house of horror with no way out.” Ouch!

Okay, so the big question is, how does one become a defaulter on their student loan? Well, if you fail to make payments for nine months or if you fail to meet other terms of the student loan contract continuous for nine months you are in default of your loan. Once you are in default of your loan the entire balance becomes immediately due.

When Does A Delinquency Period Begin?

A delinquency period begins on the very first day after your missed payment. During the first 15 days of being delinquent, you will receive a written notice or collection letter from your loan holder, in addition to notices explaining what will happen if you continue to be delinquent. Your loan holder will declare you in default if your delinquency goes on for nine months. It is best to contact your lender immediately to see what alternative repayment options are available.

Defaulted Student Loan
5 Steps to Avoid Defaulting On Your Student Loan
  • Borrow only what you need and nothing more. Over-borrowing can get you deeper into debt.
  • While you are in school live like a broke student-try not to spend too much.
  • Understand your obligations and responsibilities before signing your contract and taking out a loan.
  • Know when your payments are due and make your student loan payments on time.
  • Notify your lenders if you graduate, quit school, have financial difficulties or change address. The failure to receive a monthly statement does not relieve you of your responsibilities and obligations to your student loan repayment. So don’t even think about doing that!
Tips for Dealing with Your Loan Holder*

It is usually best to communicate with your loan servicer in writing because you will have a physical record of what has been said and done.

Keep a Record of Events. If you speak with someone on the phone, make a note of whom you speak to, when, and what was said. If you use the mail, keep a copy of your letter and of any replies you receive.

Keep the Evidence. Keep the originals of all receipts, bills, letters and e-mails regarding your account. Provide copies of the originals if you are asked for them. Send letters via certified mail, with a return receipt requested.

Stay Calm. If you are confronted by someone directly, don’t let the emotion of the moment get to you. If you are clearly not getting an adequate response, simply take the next step in the procedure for resolving your problems yourself.

Write Clearly and Concisely. Be polite and courteous, but don’t be afraid to convey the detail of any incident and to articulate your concerns. Write down the facts in a logical order and stick to what is relevant. Remember to include important details like your account number or social security number. Put these details at the top of your letter.

Agree on a Reasonable Time to Expect a Response. Ask for a response in a reasonable time, and be sure to tell the person how you can be reached.

*From the Federal Student Aid Ombudsman of the Department of Education

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Posted in Financial Advice, News and Advice, School Loan Debt, Student Loan | 5 Comments »

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