Graduates Alert – Plan Ahead For Student Loan Repayment

Author: Sally Croft

With regard to student loan repayment, it is quite important that you plan well in advance. If that is not the case, you may have some problem in following the repayment schedule.

Monthly Source of Income

You will face no problem in student loan repayment when the repayment schedule is set on the basis of your monthly source of income. Make sure that you only take loan from a lender which is willing to set your repayment schedule on the basis of your monthly source of income. To get a better idea of your repayment schedule, read the terms and conditions of your loan agreement carefully.

Working Part Time

To pay your Student Loan on time, it is of paramount importance that you start working straight after completing your graduation. If you are not able to get a full-time job, make sure that you start working on a part-time basis. Just because you are not getting lucrative job offers, it does not mean that you stop working. If there is any sort of delay in the repayment, there is a good chance that your credit rating will get worse and you will face rejection from the financial institution when you apply for a new loan.

Paying Early

If your monthly source of income is high and you have ability to pay much more than your monthly installment then it is recommended that you request your lender to increase the amount of your monthly installment. By following this route, you can save plenty of money in the long run especially in the form of interest rates.

Fixed Interest Rates and Adjustable Interest Rates

For the timely repayment of your student loan, it is quite vital that you make a right decision in terms of interest rate type. You have two options in this regard, fixed interest rates and adjustable interest rates. Fixed interest rates are tailor made for students whose monthly source of income is limited and cannot afford any increase in interest rates. On the other hand, adjustable interest rates are ideally suited for students who are willing to take a risk on the market condition. Often, it can reduce your monthly installment by more than 10 percent. To get the best out of adjustable interest rates, you need to keep a keen eye on the market condition. If possible, take the services of a professional company which has an expertise in predicting market condition.

Tags: Fixed Interest Rate, interest rate, Monthly Installments, repayment, Repayment Student Loan, student loan
Posted in Repayment Student Loan | 6 Comments »

May

Parents’ Guide to Student Loan

Author: Sally Croft

As a parent, it is your responsibility to ensure that your child opt for a right kind of student loan. Make sure that you read the terms and conditions of student loan carefully because your child with limited knowledge may face difficulty in understanding it. If possible, select a financial institution for your child student loan on your own. When you do this, you give your child an opportunity to concentrate solely on his education.

Interest Rates And Repayment Schedule

To give your child best student loan package, you need to take into consideration interest rates that are being charged by the financial institution and repayment schedule. To get an idea of interest rates that is prevalent in the market right now, it is recommended that you shop around in the market and take quotes from at least ten financial institutions. Regarding repayment schedule, it is quite vital that you only select a loan package which gives some breathing space to your child in terms of repayment. Make sure that you select a student loan package for your child where repayment period only starts when your child get a job.

Application Procedure

When there is lot of paperwork involved in the application procedure of a student loan package, the study of your child is definitely going to suffer. To get rid of this situation, make sure that you select a loan package for your child where not much paperwork is needed and your child will get an approval quickly. In some cases, parents also need to participate in the application procedure as financial institution only gives an approval for a loan when parent sign the agreement paper.

If the traditional financial institutions are not giving an approval for Student Loan because of bad credit rating, you have an option of taking the services of online lenders. The best part about online lenders is that they no not implement any credit check on you. Further, they give an approval straight after receiving your application.

Placement Agencies

You can take the services of placement agencies in order to get an internship offer from top organizations. Placement agencies can also play a prominent role in letting you understand all the important concepts related to internship. There are lots of placement agencies that provide all this free of cost. As placement agencies have normally good contacts with companies, they can help you in securing an entry level job straight after earning a degree.

Credit Rating

As a parent, you need to make sure that the credit rating of your child does not deteriorate. Once the credit rating of your child deteriorates, it will be really tough to improve it. To ensure that credit score of your child does not deteriorate, encourage your child to pay monthly installments on time. When your child pays monthly installments on time, there is a strong possibility that financial institution will give some discount in the form of interest rates. In some cases, financial institution will also provide your child grace period facility. During grace period, your child does not need to pay any money to the financial institution.

Tags: Financial Institution, interest rate, Parental Guide, Repayment Schedule, student loan
Posted in Student Loan | 1 Comment »

Jan

15 successful Student Loan Repayment Tips

Author: Sally Croft

Friends! I am sure out of the many New Year Resolutions this year; repayment of student loan would have had the top most priority. Well, though it is understood that you need not repay your student loan until you complete your study program, it is important to plan for it ahead. Helping you fine tune your repayment plan program we are offering you 15 successful tips which are handy and practical.

You can opt for auto debit facility. It helps you make the payment on time. By deducting your monthly payment electronically you save time and money.
It is important that you calculate and choose a repayment plan that falls well within your monthly budget.
Keep the lender informed about your name and contact details, to ensure that you receive all communications from your lender and know your repayment liability, options and deadline.
Keep a tab on your expenditure. You should be able to balance between your personal expenditure and repayment liability. It is important that you choose between your needs and comforts.
Whenever you opt for taking Student Loan be careful about components such as upfront fees, which is charged around 4% of your loan amount. Out of which a percentage goes to the lender and a percentage to the guarantor. On a proper negotiation, I am sure these amounts are waived reducing the cost of your borrowing.
If you are under the impression that the amount of borrowing is more than what you can afford, then you should visit your lender’s office and speak your problem. They will surely have ways to sort out your need with minimal liability.
Understanding the maximum amount of loan you can afford is a serious issue. The general advice is that your monthly commitment on repaying your loan should be around 10 to 15% of a fresher’s monthly earnings. This ensures manageability of your debt.
When opting for repayment options, be careful about balancing your short term payment relief with the long term cost you incur. By extending the period of repayment for a lower monthly liability you generally end up paying more.
To avoid the increase in your cost due to repayment options chosen, you should get back to the regular or the standard repayment plans by increasing your monthly commitment.
Do not forget to make use of the tax advantage you can claim on the amount of interest paid on the Student Loan. This is applicable on the loan availed by both the students and parents for educational purposes.
You might end up facing trouble while repaying your loan amount due to multifarious reasons such unemployment, health reasons, or planning to take up higher studies. You can always inform the lender about your circumstance and request a deferment or forbearance, which are legitimate ways of postponing your repayment until such time you hit back to normalcy.
Pay a little more than your regular installment in order to reduce your principal liability. While your monthly installment is used to cover interest and other fees in the first place and the remaining towards principal repayment, ensure the extra amount paid should be applied towards principal repayment reducing your liability.
Consolidation is a good option for stabilizing your repayment plan. By consolidating several loans into one single liability at a comparatively lower rate of interest, it gives more clarity and easier manageability of your loan liability. At a lower cost and better terms of pay you ensure successful repayment.
Loan forgiveness is an option available to wipe away your entire loan liability by performing certain services or accepting to certain conditions offered by government as well as non profit agencies.
Always ensure not to default on your student loan. Because this option seriously affects your eligibility of availing federal loans and grants in future. Causing a major black mark on your credit report. You can talk to you lender about your financial crisis and sort out your repayments option.

Listed here are only fifteen repayment tips, I am sure there are many more. Friends any useful tip should be used and not ignored, hence if you have one that is not listed here, please do let us know so we can share with others.

Happy Learning