As the cost of education is rising high, student loan has become inevitable for numerous consumers. Only taking out a student loan isn’t the last thing that consumers need to worry about. It’s also important to think about the repayment. Now, tough financial conditions often make it difficult for consumers to pay off the student loan successfully. However, if you’ve taken out federal student loan, then things can be a bit easier for you. You can eliminate your student loan debt with the help of student loan forgiveness program.

How federal student loan forgiveness may come to your aid?

Through the special loan forgiveness program you can get all or a portion of your student loan cancelled. For the Direct Loan borrowers, there is a range of programs available. The programs are:

• Forgiveness for volunteer work

• Military loan repayment

• Public Service Loan Forgiveness

• Teacher Loan Forgiveness

• NHSC Medical Loan Repayment Program

These specific programs help troubled debtors in the following way:

1. Helps debtors who work as volunteers: If you work in any volunteer organization like AmeriCorps and PeaceCorps, then getting loan forgiveness won’t be tough for you. By working as a volunteer you can easily apply for the deferment of your Perkins and Stafford loans. Of course you must have working experience of at least 12 months.

2. Specific programs are there for teachers and military officials: Just like volunteers, there are separate programs for teachers and military officials as well. You may search through the website of Department of Education for teacher’s programs and contact the local recruitment office to get details about the programs for military people. In this way you’ll be able to find out the best program for yourself.

3. Program for public servants are available as well: The Public Service Loan Forgiveness is meant for people who work in public service field. To qualify for the Public Service Loan Forgiveness you need to be regular on your loan payments. If you’ve successfully made 120 regular payments, then you can apply for the program.

So, if you’re struggling to pay off your federal student loan, then opt for student loan forgiveness. This will help to keep your debts under control.

Are you in the market to look for the small business financing options? If you had the idea to set up a new business of your own and you have everything ready for the venture, the only thing that is lacking might be the funds. You need not worry about the funds as there are different loan programs that you can take resort to. Before you move into the small business loan market, you have to make sure you know each and every option that is available. Here are the options that you may take into account. Continue reading →

Student loans play a huge part in the higher education of millions of American students. There are approximately 20 million students and of those students, over 60% use student loans in order to pay their way through college and to fund their living costs. Higher education tends to be subsidized much more in other parts of the developed world, but in the US, a lot of higher education is instead subsidized by students and families. However, those who are not in the position to fund their own way through college are often eligible for help in the form of a student loan. There are a huge number of loans and which loans you are eligible before vastly differs from state to state and criteria at certain colleges. Learn more about some of the different types of student loan with our need-to-know guide.

Broadly speaking, student loans are split into two categories: federal loans and private student loans. Federal loans are funded by government and private student loans by private lenders, such as state-affiliated non profit organisations, institutional loans provided by specific schools and loans from banks.

Federal Loans

Federal loans can be paid to students, or to parents. When loans are paid to students directly, there are a huge number of qualifying criteria. For example, when students are enrolled in at least half-time status, they do not need to make payments on their loan. When they drop below half-time, the loan account enters what is called a “grace period” of six months, whereby no payments have to be made for six months. After this time, payments usually begin unless the student goes back into half-time classes or more. However, if they drop below half-time again, they will not get a second grace period. Amounts paid to students can often be limited.

Disabled students can often qualify for a 100% loan dischargement, provided that they meet the criteria. Loan forgiveness can also apply to teachers in critical subjects and in schools where more than 30% of the pupils qualify for a reduced-price lunch. Individuals who enter full time employment in a public service or sector position, or who serve full time in the AmeriCorps or Peace Corps, will also qualify for loan forgiveness when they make 120 consecutive loan repayments over a period of 10 years, with no missed payments. However – and this is definitely worth remembering – loan forgiveness does actually count as income by the Inland Revenue Service.

Federal Loans to Parents

Federal loans to parents tend to have much higher limits, simply because parents tend to be much more able to meet loan requirements and to pay the loans back. However, payments start immediately, regardless of whether the student is in full or half time education.

Private Loans

There are a huge range of private loans. Generally speaking, however, private loans can be made to either students or parents and often have much higher limits than federal loans. Payments do not usually start until after graduation and can sometimes be deferred further if the student enters a graduate or further education program – but, interest does start to accrue as soon as the loan is paid. While federal loans typically cover college tuition only, private loans can generally be used to cover tuition, computers, accomodation and board, educational materials such as books and computers, past due balances and more. Private loans do not have to be exclusive of federal loans – they can be used to supplement any federal loan that the student receives.

Other Forms of Federal and Private Loans

There are a number of very specific federal and private loans that can be made directly to the parent, school or student, and that can be used as the main loan or as a supplementary loan.

• Stafford Loans. Stafford loans are the most common federal loan. They can be subsidized, depending on income and financial need, or unsubsidized and not based on financial need. Interest rates are typically less than 7%.
• Perkins Loans. Perkins loans are supplementary federal loans for students that demonstrate extraordinary or exemplary financial need. They can usually borrow up to $5,500 per year, or $8,000 per year if they’re in a graduate program. Interest is fixed at 5% for Perkins loans and repayment does not start until 9 months after the student completes their studies.
• Parent PLUS Loans. Parent PLUS loans are exclusively for parents, adoptive parents and in some cases, stepparents of a student. These loans are not based on financial need and instead eligibility depends on credit history. For those with a credit history that isn’t quite good enough to qualify, co-signees can sometimes be used in order to guarantee the loan. There are no lending limits with a Parent PLUS loan and instead, parents can borrow up to the value of their child’s attendance at the school (rates determined by the school), minus any other aid (not loans) received. Payments can commence as soon as the loan is paid, but in some cases can also be deferred until six months after the student drops below half-time studies or completes or withdraws from their program.
• Grad PLUS Loans. Grad PLUS loans are available for professional students in half-time studies, graduate students or students in a graduate program. They can borrow up to the total cost of their education, minus any aid (not loans) received.

Consolidation Loans

Consolidation loans are a form of loan designed to help you extend your repayment to 30 years, rather than 10 years. Extending repayment will usually increase interest rates but this can be a really useful way to lower repayments if you are on a low income.

Institutional Loans

Institutional loans are similar to private and alternative loans and are simply additional aid that is provided directly from your school. Private loans are similar, but are provided by banks and other financial institutions instead and these are usually incredibly useful for students who do not qualify for other forms of financial aid.

We’ve still got a lot to tell you about student loans – so come back soon for part two of our guide.

The personal loans market is back to its competitive best, with a huge range of personal loans up to $15000 available at a very reasonable APR of just 5.6%. These interest rates are the lowest we’ve seen since before the recession, so now is most definitely the time to apply! To help you out, we’ve come up with three quick tips to help you take out and secure a personal loan.

Shop Around

Although you should be doing this for each and every financial product you purchase, it’s especially important that you shop around when looking for a personal loan. This doesn’t mean that you have to actually apply for each loan (doing this and getting rejected could really impact your credit score) but it’s worth taking a look online or popping into the local branches of some banks to take a look at their lending rates and how much money they’re willing to lend. Banks often say that they offer their cheapest loan rates to existing customers but this is not always true and you might find cheaper loans out there from companies or banks that you might not have even considered.

Go Through the Preliminary Application Process

Many loans have a preliminary application process and this is a great way to test whether you’ll get accepted for the loan and how much APR you’ll pay. Most preliminary loan applications are fairly short and you’ll only need to provide information like how much money you make each year, whether you’re in any debt and how much money you can afford to pay back each month. During the preliminary application, no credit scoring information is taken and you will not be credit checked. This is really important, as if it comes back that you are not suitable for the loan, it won’t affect your credit score in any way. Once you’ve narrowed down the selection of possible loans to three or four, it’s worth going through the preliminary application for each of them – how much APR you’re likely to pay could differ from the advertised price, so this is a great way to learn more about exactly how much you’re going to have to pay.

Take a Look at the Small Print

Some loans might sound fantastic on the surface, but when you look at the small print, have a number of terms and conditions that might be difficult to adhere to. For example, loans offered to current account customers might require you to pay in a set amount of money each month. Supermarket loans might require you to have a loyalty card and have used it within the past six months, while others might require you to have a set amount of points. Take a look at the small print and only apply for the loan if you know that you can adhere to the terms and conditions. If not, the loan isn’t for you and you need to keep looking around.

Applying for loans can be a difficult and lengthy process, so adhering to these clever tips before you get started could save you a lot of time and effort.

Unsecured loans are loans that are not secured against any assets. An unsecured loan is often provided by a bank, of a value up to about $25,000, or from a general lender, whereas a secured loan is usually provided by a bank. A secured loan differs from an unsecured loan in that it is secured against assets, such as your property. When you fail to pay a secured loan, the bank can satisfy that loan by foreclosing on your property – and if you fail to make the payments, you could lose your home. On the other hand, you can usually get more money if the loan is secured against an asset, and if you have the means to pay the loan back, it’s an excellent way to secure extra funds. Learn more about unsecured loans and secured loans with this simple guide.

Unsecured Loans

Unsecured loans with a low interest rate are now harder to come by than loans with higher interest rates or secured loans with a low interest rate. Why? Banks want to make absolutely sure that they’ll get their money back – the banking crisis and the fact that thousands of people are in debt because of wanton lending over the last ten years means that they are more cautious than ever before and so most of the time, the only people that banks will lend unsecured loans to are those with excellent credit.

You can get unsecured loans of between $3,000 and $25,000, depending on your credit and your income. Most lenders will be flexible and will let you make overpayments and will also allow you to pay the loan back early. In some cases, you will have up to 25 years to pay the loan back. With unsecured loans, you don’t have to worry about losing your home if you fail to make your repayments, although if you do fail to pay the loan back on time, it will have a major effect on your credit score and could seriously affect your ability to borrow in the future.

Secured Loans

Loans that are secured against a property with a mortgage in place are known as second charges, whilst loans that are secured against a property that is owned outright with the mortgage completely paid off are known as first charges. Secured loans used to be seen as a last resort, as people didn’t really want to have to secure a loan against their property – and secured loans might also carry a higher interest rate. On the other hand, people can usually get between $3,000 and $100,000 for a secured loan – as it is secured against an asset – and the loan can be paid off over a period of up to 25 years. If you’re self-employed, if your credit score is poor, if you’ve recently changed jobs or if you’ve recently moved house, a secured loan might well be your only option.

Come back soon to learn more about all of the different types of loan on offer.

Whether you want to expand your current business or are looking for someone to invest in your start-up, at some time or another, most small businesses will need a small business loan. Business loans are necessary not only because they provide small businesses the financial support that they need, but also so that businesses can thrive throughout periods where the economy might not be particularly strong. For economies to thrive, consumers need to keep buying – and consumers can only keep buying if there are enough businesses out there providing them with the goods and services they need.

Learn how to get a small business loan, whatever your circumstances, with our step by step guide.

Get to Grips With Your  Credit Report

If you’re a new business, you may not have built up a credit score yet and so the lender will look to you and your credit report before agreeing to lend you any money. Before making an application, get to grips with either your credit report or your business’ credit report, to ensure that it is up to date and that there are no errors. Any errors will only make the whole application process much, much longer, while incomplete or missing information will also need to be updated before your application can be put through. At this stage, you should also check your credit score. Lenders often use the score as a guideline and if your score is particularly low, it’s unlikely that your loan application will get accepted. Equally, if you‘ve made numerous applications within the last few months that were rejected, it’s unlikely that the loan will be accepted. Be sensible with how you ask for credit, be sensible with your spending, keep spending on company credit cards to a minimum – less than 30% of the overall limit – and then make your application when your credit score has improved or once you’ve built up some credit. You’ll then be in a much stronger position and it’s more likely that your application will be accepted – if you follow the steps below.

Contact Lenders to See Which Documents You Need

The documents that you’ll need to make the loan application will differ massively from lender to lender, but generally, you’ll need proof of address – such as a bill to the address of your home or to the address of the business, proof of identity (which proof of identity depends on the lender), a loan proposal and a decent credit score. You should not have defaulted or been bankrupt within at least the last 12 months, you should be up to date on all bills both personal and business related and you should also have not missed a rent or mortgage payment within the last 12 months – again, either on your personal property or your business premises. You might also need to include past business tax returns, especially if you’re an established company. This will give any prospective lenders a good idea of how much money your company makes, although tax returns don’t display how much money you were able to write off – so some lenders might require that you supply them with three year’s worth of bank accounts or year-end statements showing profit and loss. Lenders want to know when you’re going to be able to pay the money back and so most of them will make sure that you’ll be able to pay the money back before they give you a penny.

Craft a Business Plan

Most of the time, you’ll need to craft a business plan in order for lenders to see exactly what you need the money for, why you need it, what you’re planning to do with it, how you think it will improve your business and when you’ll be able to pay the loan back. There are a few key things that you’ll need to include in the business plan, and these are:

• Exactly how much money you need and why
• What you’re planning to do with the money once you receive it
• How you think the money will improve your business as well as some projections for the next few years of the business – i.e., if you receive this money, how much money you think you’ll make because you’ve been given the money and how much money you think you’d make if the loan application was rejected. Emphasise how much you need the money because of what it could do for your business
• Use the last point to emphasise that you’ll be able to pay the loan back in a reasonable amount of time because you’ll make money due to having sufficient cash flow in your business

If you need to, get a professional to write out your business plan for you, especially if you’re new to business and if you’ve never written a business plan before. If your business is completely new and you cannot reasonably make projections for the cash flow, supply the lender with a study of your market and if you’re exploring a new niche, gather enough evidence to show that it is profitable.

Ask About the Small Business Administration’s Guarantee

If the lender rejects your loan, ask them about whether they could guarantee your loan underneath the small business administration’s guarantee. The SBA guarantees loans that the lender wouldn’t otherwise be able to afford to make, so if they’re worried about your risk level or whether or not you’re a good loan prospect, the SBA could help. There are a number of certain qualifying factors that you’ll need in order to be able to get a loan through the SBA but if you qualify, the loan will then be supplied through your financial lender. To learn more about the qualifying factors for an SBA loan, speak to your financial lender.

Recent studies conducted by the premier survey boards put forth a rather dismal picture as far as grants for school loans are concerned. The figures proved to be rather surprising and why not considering educational costs aren’t really anything that’s worth being too happy about.  In fact, the tuition tab for a year at a private university averages more than 30,000 dollars easily. This obviously says a lot about the kind of problems students are likely to face given the current monetary scenario when it comes to handling the rising college expenses. This is where the government grants come into the picture.

Find out more about the government grant for student loans

Here are a few things you should know when it comes to government grants for student loans. Read on to find out more.

1.The size of the loans: You should be glad to know that the United States Department of Education has federal student programs in place and they’re known to fund more than 100 billion dollars in terms of student aid. These programs are essentially responsible for administering grants as well as fund the work-study programs plus the guaranteed student loans. Now, if you’re looking for these, then you need to get in touch with the financial aid department of the respective college, university or qualifying trade school that you’re going to attend.

2.The considerations involved: Now, if you’re a student seriously contemplating financial aid, then you’d be required to complete filling out the Free Application for Federal Student Aid (FAFSA). This is essentially because almost all of the institutions that grant financial aid for higher education make use of this FAFSA. It’s essentially used to determine the eligibility of the students for receiving any sort of financial aid. This of course includes the government grants for student loans too.

3.The Stafford loans: These loans are essentially divided into 2 groups. One of these happen to be the Subsidized Stafford Loan and this is essentially need based. Herein the US Department of Education subsidizes the interest there on the loan but for a specified time period. The 2nd category essentially includes the Unsubsidized Stafford Loans and these are not based on need as such. Plus here the interest isn’t subsidized either. You could get these loans directly from the school or perhaps from a private lender.

4.The Perkins loans: You could access these loans through your college or university. They’re available at almost all levels and you need to repay it to the school.
Remember, most of these grants for student loans can’t be discharged through bankruptcy so be sure to repay them on time. Failure to repay student loans isn’t going to be good at all.

There’s no such thing as free money, right? Well, in some circumstances, there really is – an interest free loan is simply a loan that you don’t need to pay any money to receive. You get money, and all you need to pay back is the loan itself. Interest free loans are usually fairly difficult to secure, particularly if you have poor credit. But if you can secure an interest free deal, they have the potential to help you pay off your existing debts – which will save you money in the long term. We should mention that the interest free deals below aren’t strictly loans – but they are most definitely interest free!

An Interest Free Overdraft

An interest free overdraft is basically an extension of credit on your existing current account. For example, if you pay in $2000 per month to your bank account, an overdraft would extend the money available to spend on that account up from $2000, anywhere up to $7000, depending on your credit status.  Some banks offer interest free overdrafts of up to $5000, while others will offer interest free overdrafts of less than $1000. Most interest free overdrafts will be completely free of fees for up to six months, so if you need a large amount of money fairly quickly, but you know that you’ll be able to pay it back within a set amount of time, an interest free overdraft could be for you. In some cases, you’ll have to pay account charges and it’s likely that you’ll have to pay fees for the overdraft if you don’t pay it back within a set period of time. You’ll also have to pay fees if you go over your agreed overdraft limit.

An Interest Free Credit Card

Although most credit cards charge interest, there are a number of credit cards out there that offer 0% interest on all new purchases. This means that you can spend money on your card, and as long as you pay the bill back in full by the agreed date, you won’t have to pay any interest.  The credit limit that you’ll have access to depends on your credit status and your history with the company, but you could get up to $5000. “Starter” cards will have a limit of around $500, and then that limit will increase as you prove that you can be a trusted borrower. Interest free periods can last up to 18 months, so this is a great way to get access to money over a prolonged period of time. If you’re looking to pay off existing debt, but you don’t want to pay interest on that debt, you might also want to consider a 0% balance transfer card. This allows you to pay off debts without having to fork out a fortune in interest payments. The only thing to keep in mind with a balance transfer card is that the 0% interest rate applies to the balance only – if you make new purchases, you risk losing that 0% interest rate.

If you’re trying to save money or pay money off of existing debts, be sure to limit your new spending – spending money on things you don’t need will only send you into a spiral of debt. Be very cautious and be sure to spend wisely, even if you are using a 0% interest free deal.

Getting approved for a business loan can be difficult at the best of times, but in the current financial market, some banks are refusing to lend – regardless of your financial background. Lending to larger companies and commercial companies is on the rise, but lending to small businesses can fluctuate depending on where in the world you are. Banks want to lend, but many smaller banks may not have the resources to lend and support small businesses. Even if you think that you meet all of the criteria, you might not – and banks may well decline your application simply because you don’t meet one very small criteria. Before applying for a business loan, it’s important that you get yourself organized so that your loan can be processed – and hopefully, approved – as soon as possible.

Get Everything in Order

Before applying for a loan, it’s important that you get your finances in order. Although most companies need a loan in order to expand or grow, many lenders will not lend any money unless your company has been somewhat profitable for the last three years – at least. So get your books in order and take a good hard look at your credit report. If there are any errors – anywhere – you need to address them and ensure that they get fixed. Errors on your credit report can take months to fix, so spot them as early as possible and contact the credit report agency to get them sorted. If there are any serious issues on your file, such as CCJs or defaults, you can add a notice of correction to explain exactly why that issue is on your file. It’s imperative that your credit file is in good shape and if not, you need to fix it before you apply for the loan.

Explain WHY You Need the Loan

Instead of just filing an application and waiting for your loan to be accepted, explain to your bank exactly why you want the loan and what that loan could do for your company. Refusing to explain why you need the loan will more than likely result in your application being declined – it’s as simple as that. Put together a business pitch and demonstrate why you need that amount of money, how you plan to spend the money, what the money will do for your business and where your see your business headed over the next five years, the bank will be much more likely to seriously consider your application. Highlight past investment successes within your business and back yourself up with account statements.

It’s also a good idea to give the bank a comprehensive overview of the day to day running of your company. For example, who will be running the company, how the business will operate, the experience of the managers and owners and how you plan to train and hire new staff. It’s also important to provide projections – but make them realistic and provide data to back yourself up.

Have a Secondary Source of Repayment

Some lenders are looking for at least two sources of repayment, and if you’re setting up a business or looking to expand your company, this could involve repayment from investments, from your salary or from the profits that you expect the business to make. Most banks will prefer a solid and guaranteed form of repayment, rather than projected future earnings, so make sure that you have the funds to pay the loan back. Don’t quit your day job!

Some lenders will also want to have something to secure the loan against – a large piece of collateral, such as a home, property or business premises that they can sell if you fail to make the repayments. If you don’t own your own home, or if you have collateral that isn’t valuable, you might find it tricky to get accepted.

Bring Everything to the Table

Most lenders will require a lot of supporting information before they’ll be willing to lend any money, such as personal financial information, tax returns, bank statements, profit reports and more. Most banks will also need data that proves that you live at your address, such as two or three bills that are addressed to you at your home. Get all of this information in order and bring everything to the table so that your loan application can be put through as quickly as possible.

When it comes to getting approved for a loan, you really need to pay attention to the smallest details – check and recheck your application to make sure you’ve included everything that you need to include, ensure that the bank will have a complete overview of your character and of what you plan to do with the money and that your credit report is squeaky clean. Following these tips should definitely increase your chances of approval – but if you still fail to get approved? Ask the bank why they declined your application and  if they can’t give you any answers, wait for at least three months before applying elsewhere.

Preapproval is the process of getting approved for a loan before you even apply. Preapproval is essential for people with less than perfect credit scores, as each time you apply for a loan, it appears on your credit report and it can even reduce your score – and if you apply for multiple loans and are declined each time, your score could plummet. Preapproval means that you don’t actually have to apply in order to be approved, meaning that your credit score isn’t affected. Here’s how to get preapproved for a loan.

Know Your Credit

Your credit score is key in getting a loan, but knowing your credit score is not enough. You need to take a good look at your credit report so that you can clearly see what might be putting potential lenders off – and then you can fix it. For example, if there are any errors or mistakes on your file, or if there is any incorrect information, it could lower your score. Incorrect or incomplete addresses and a missing home telephone number could also lower your score, so ensure that all of the information is correct, and if not, change it. Keep in mind that it could take some time to rectify any errors on your credit report, so you should get started at least a few months before you need the loan.

Find a Good Lender

There are literally thousands of lenders out there, many of which will be willing to preapprove you for a loan before you go ahead and apply. Find the right lender for you and you’ll be much more likely to get accepted. If you have poor credit, but a good income, there’ll be a lender for you. Equally, if you have poor credit and a poor income but can prove that you can pay back the loan, there will still be a lender for you. Find the right lender for you and you’ll be much more likely to get preapproved, so do your homework.

Get Prepared

You’ll be asked about your income, your outgoings and possibly your tax status when applying for a loan. You’ll also need to have to hand bills that have been addressed to you at your current address in order to prove that you live where you say you live, and you’ll also need to provide information about what you actually want to buy with that loan. If you’re buying a car, for example, outline  the model, make, and year of the car that you’re planning to buy instead of just saying, “I want to buy a car”. The better prepared you are, the more of a genuine prospect you’ll appear to be and this should help you sail through the preapproval stage and beyond.

Apply!

You need to apply to be preapproved; it doesn’t just happen! Find lenders that are willing to offer preapproval status and send out an application. Once you have been preapproved, and once lenders have acknowledged that you’re a safe risk, you’ll be able to go on to apply for a loan without having to worry about it affecting your credit score if you get declined.

Remember, preapproval status doesn’t last forever. Once you’re preapproved, you have to apply right away in order to be considered for a loan. If you wait for even just a few months, you’ll have to start the process all over again, so be quick.