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Thursday, May 28, 2009

Student Loan Repayment

Here are some great information regarding the student loan repayment, for those who want to consider take up the student loan for their study, need to understand the student loan repayment also, this article can help you greatly to decide if you want to take up the student loan or not.

Student Loans need to be repaid even if your economical circumstances are difficult, you don’t find the job you had expected or you haven’t completed the education you paid for with the loan. Or even if you think the education received is not useful to you. Remember that the student loan is yours, and it’s a legal and real loan. You have to repay the principal amount borrowed and whatever interests have accumulated.

Apart from filling in the FAFSA application at fafsa.ed.gov you must also sign an IOU document by which you oblige yourself to repay the total sum lender to you plus interest.

Get well informed on the conditions you are accepting by signing the loan application and don’t lose contact with the financial institution granting it, especially if you have trouble to make a monthly payment or your personal situation changes. Every financial institution will be able to help you by reviewing your repayment terms and conditions, offering you a consolidation loan or deferring payment, so don’t hide from your financial institution: that will only make the problem worse.

Don’t forget to communicate to the holder of your loan any changes in your present circumstances, like:

* Change of university
* Leaving studies
* New graduation date
* Becoming a part-time student
* Address, name or phone changes
* Payments to be deferred
* Not being able to make payment

The NSLDS (National Student Loan Data System) allows you access your data (federal loan and grant status, loan repayment, etc.) as well as to view your current loan balance and details of pending payments. Go to www.nslds.ed.gov

How to check the status of the student loan. To access to the Student Loan Data System is necessary the PIN (Personal Identification Number) that appears in the SAR document received after completing and submitting the FAFSA form. If you don’t know or you have forgotten the PIN number, you can apply for it on internet site.

Ways of repayment

Your monthly repayment amount will depend on how much you borrowed and on the total length of the loan.

You will have a “Grace Period” before starting to pay your student loan, after you graduate or leave the school.

Each Student loan has different “Grace Period”:

* Six Months for Federal (FFEL) or Direct Stafford Loans.
* Nine Months for Federal Perkins Loans.
* 60 Days for Federal or Direct Plus Loans for Parents.

Your loan holder will notify you when your repayment loan is due to start.

My next discussion explain the existing repaying options. They include examples of how monthly repayment sums are calculated, and they also provide information on other issues that need to be addressed when considering a loan, stay tuned.

Wednesday, May 27, 2009

Consolidate a Student Loan

Here is another great article that I have read about the student loan, consolidate a student loan could be a very good choice for the payback.

For many college students nearing graduation or having recently graduated, it may seem like there are too many options for consolidating school loans
. However, consolidation options are being eliminated for many students.
> How is this happen?

The Deficit Reduction Act, which was signed into law on Feb. 8, 2006, eliminates the ability of most students and parents to re-consolidate their loans, no matter what other lender offers them a better deal down the road. Borrowers whose loans are owned by a single lender have long been barred from shopping around for better consolidation rates. Although Congress was scheduled to repeal that law, called the Single Holder Rule, the proposal to do so was dropped from the Deficit Reduction Act just before it was signed into law.

A loophole (You mean loophole in student loan)in the law has previously allowed lenders to circumvent the Single Holder Rule by moving an existing federal loan into a federal program, and then moving that loan back into their own consolidation program. However, the Higher Education Reconciliation Act (HERA), part of the Deficit Reduction Act, has also ended the ability to circumvent the Single Holder Rule.
> seems like a good news to us.

The elimination of the loophole leaves students and graduates who have all of their loans with the same private lender stuck in a non-competitive market without the option to compare benefits from multiple lenders. (This does not apply to borrowers with ALL federal direct loans through the federal government.)

> Now they come to catch you.

Because of these changes in the law, students who currently have many loans through one lender (excluding the federal direct loan program) and new students who are looking into their options for funding their educations should seriously consider having more than one lender. By having at least one loan from a different lender, students and graduates can still shop around for consolidators when they near graduation or during their six-month grace period between graduation and when their first loan payment is due.
> This is very true, no matter what!

There are many advantages to be had for a student who has the ability to shop around for consolidation lenders, such as principle and interest rate reductions, and lower monthly payments. Lenders like Student Lending Works can sometimes offer incremental reductions, which can be a great benefit for students.
> This is a good advice!

Student Loan

Up till now, I am still not able to save enough money to pay for my study in the university aboard, I may now consider to take up a student loan from the bank that I am working for, before I apply for the student loan, there are many thing that I need to consider before I apply for the student loan, bank now is not that easy to grant you a student loan if you do not show your ability to pay back after you get the student loan.

Some great information about student loan that I read in some article like:

There are various resources to find money for a college education. Student scholarships, student loans, and grants are available to get a college education. After going through the merits and demerits, the best option may be chosen.

Student loans are different from a student scholarship since they have to be repaid. Student loan schemes are available in two different types. One is a subsidized loan and another is an unsubsidized loan. The interest for the subsidized loan is taken care of by the Federal Government in USA and in other countries the finance ministry provides some sort of assistance, whereas the unsubsidized loans carry a normal percentage of interest. Eligibility for a subsidized loan can be found out by filling in the relevant details online

The students and the parents can become tense at the time of planning how the expenses of a college education will be met.

To finance a college education, a programme called FFELP (Federal family education loan programme) provides the most flexible and affordable student loan options. Using the loan finder web service a student can find all the required information for applying for a federal loan online. Find more info at www.loanresourceonline.info

Additional finances not covered by the federal programme such as education related expenses, overseas study, and housing can be procured through a private student educational loan. When compared to credit cards, these programmes carry a marginally lower interest rate and have very easy payback terms.

Many of the student loan agencies - both government and private - have online submission and processing facilities hence the loans are accepted after a review within a week or sooner. The repayment of the Federal student loan can start six months after the graduation of the applicant.

Student loans can be used not only to pay the fees but also for lab fees, dues for associations and housing. A student can still avail an educational loan even though the tuition is covered by a grant.

A student who is eighteen years or above in age, can apply for a student loan. Most of the student loan is deferred for repayment until the student completes the education or leaves the school.

Private loans for students are not given without a co-signer or a credit report. Credit unions give student loans if a vehicle or a boat is provided as collateral.

During the cumulative credit period, a student has the option of paying or not paying the interest part of the loan. It will become easier if periodical payment is made to cover the interest. If this is done, the capital repayment after completing the studies becomes easier for a student.

Student loans are to be repaid in ten years. Nevertheless, longer repayment facilities are provided to large student educational loans.

I am therefore will consider and prefer student loan over private loan.