Student loan consolidation

Okay, so depending on your situation it may not be exactly simple, but it’s easier than you think. Who am I kidding? There isn’t any method or way of reducing debt, especially if it has been left to accumulate for a long period of time. But whether it is a $2000 credit card debt or a $40,000 student loan, you can get out of debt and this should be the main priority in your life. All it will take is a slight shift in your financial habits, exercising some will power and the following debt elimination tips.

The reason analysts are emphasizing that now, more than ever, is the most important time to get yourself out of debt is because of the world economy and the future of money, especially for Americans. Most people today are concerned about just one thing, money. Our society in America and now even many in the church are consumed with wealth and prosperity. Is there anything wrong with wealth and prosperity? No of course not. What is wrong is this. Have you ever heard the term, “fake it till you make it”? This term simply implies that you need to act like you are in a certain place, situation or feeling that you do not actually possess.

If you ask the average person, they’ll tell you that getting out of debt can be famously difficult. But it is important that people who are in debt focus on trying to clear their debts rather than thinking about getting in to even more debt to tide them over in the short term. So many people that have debts continue to take out loans and credit in order to try and ease their finances, and whilst this may work in the short term it can make life very difficult in the long term.

By: Warren Frump

As a student you are going to have to learn to cut your costs. Your income will be severely limited, and it will be vital for you to avoid unnecessary expense, and to keep any interest charges on loans to a minimum.

You will have plenty of company and will be able to compare notes with fellow students on how to eke out your income to the best effect. The final choice on how you raise the necessary cash for course and living expenses will however be yours. You will need to evaluate your options with care, and ensure that you make every pound worth as much as possible.

This may sound like a ridiculous statement, but bear in mind that you could easily reduce the value of your pounds if you commit to loans for which you will have to pay interest charges. Those charges must be paid come what may, if you are not to find yourself heading for a slippery slope on which interest is added to interest.

Let us emerge from this gloom! Interest free loans can be obtained – your Local Education Authority (LEA) is well used to dealing with these. You may find that, if your family income is relatively low your tuition fees will be paid for you in full, and there is a sliding scale which requires some payment from students from families who are over the threshold. You may have heard that all tuition fees are paid by the government, but sadly this no longer applies. Increases in university admissions made it no longer viable, and in addition a theory was applied which said that ex-students would be better able to pay off the costs when they were in well paid employment.

This theory was not applied fully, with the result that the maximum tuition fees for which a student is responsible is ¼ of the cost – currently around £4000, although universities do keep increasing their fees. The remaining ¾ of the cost is covered by the government.

Despite evidence to the contrary it is accepted that students need to eat and that a diet of beans may be high in fibre but can be exceedingly monotonous. This is where your LEA will help, and you need to discuss your situation with them as soon as the course which you will take is determined. They will work out what you can borrow and the student’s loan company will be responsible for ensuring that this money is available to you for the student year commencement.

We have already said that you need to avoid having to pay interest charges. Well, a student loan is as about near as you can get to this. Interest on the loans (which by the way are unsecured) will be at a rate which takes account of inflation, so that you will only pay back the equivalent sum to that borrowed. Best of all, no repayment will be required until the end of the tax year after graduation, and even then this stipulation carries ‘get out’ clauses. No repayment will be required until your income reaches a threshold which triggers the requirement; additionally, the rate of repayment will be adjusted to tie in with your earnings level.

There is yet another get out clause; if your earnings never reach the repayment threshold, they will be written off completely at age 65! It really is a shame that this type of loan is not more universally available!

Whether you will ever reach the repayments threshold is in your own hands to a large extent, and it could take several years after graduation before you do. During this time you will have the millstone of debt haunting you; currently the average on leaving university is over £10,000 and this is expected to increase considerably in the next few years. At least you have the reassurance that the amount owed is not increasing in real terms – there is no interest being charged on interest.

If you possibly can, avoid all temptations, especially of the financial kind. A credit card is a hand grenade if the hand holding it is desperate. Agreed, they are no problem if paid off in full every month, but this is not your aim is it? You need cash and you need it now. So very shortly you find that your repayment is inconvenient or impossible, and there you are on the aforementioned slippery slope of interest charges.

Banks offer interest free student loans but these also carry in-built dangers. You can usually borrow around £2000 (a sprat to catch a mackerel – they want your business when you are a high-flyer) but exceed your limit and wham!! You are just another customer and you are likely to find yourself paying for an unauthorised overdraft plus high interest charges.

Really, when it comes down to it, you have but one choice. Conduct your financial affairs with great care and in fine detail; you will benefit greatly in the short term and once you ARE a high flyer, then the world will be your oyster and maybe you will even be able to dictate the terms of a loan.

By: Michael Challiner

When a student or parent sets out to obtain a loan and/or financing a college education there are a many different sources they can go to in order to acquire the funding necessary. However, there are two different categories of loans which are either federal loans or private loans.

As for federal funding for college, in many cases it is much easier to get the financing if you fit the criteria set in place. By far, one of the most popular federal student loans is the Stafford loan. There are two types of Stafford loans which are the federal family educational loan and the William D. Ford federal direct loan. The process of obtaining a Stafford loan is through the student filling out a federal student aid application, then once approved they will sign a promissory note on the loan.

The only real difference between the two types of Stafford loans is where the actual funding is coming from. For a direct loan, the funds are coming directly from the federal government as for a FFEL loan, the funding comes from either a bank, credit union or another participating lender in the program.

There are also a couple more that should be mentioned in this article and those are the Parent PLUS and Perkins loans. First, the Parent PLUS loan is designed for parents in need of assistance for paying their child’s college fees. This loan basically will fill in any gaps that the parent needs in order to cover all the college expenses fully.

The Perkins loan is basically a student loan which can be applied for at the college or university financial aid office which usually has a very low interest rat, but has a maximum loan amount of around $4,000 each year for students. They are federal fund and can be added to other types of funding. There are late fees and fees for skipping payments on the Perkins loan as well.

These loans and more can all be inquired upon at your selected college or university.

Credit history may not be as necessary if it is necessary at all in obtaining these types of funding options. As opposed to federal student loan funding, there are many private lenders willing to provide assistance for college funding as well. However, if you so decide to take the private lender route for financing a student loan, it is important to remember that most will need a bit of a credit history from the potential debtor and will most likely require a co-signer on the loan if the student with not much credit history at all is attempting to obtain the financing.

Federal funding for college students who need the financing, as well as parents is very available for anyone who has a need for such funding and it would be a good idea to look at all the options available in order to compare interest rates, fees, and more as these student loans will be around for a while after college as some loans will begin the payment schedule immediately during college like the Parent PLUS. Other repayment schedules will begin after 6 months for Stafford loans and 9 months for Perkins. So it would be a good idea to get all this information first hand before making any quick decisions about your college student loans.

By: S. Michael Windsor