Government grants for student loan – Few things you should know

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.


How to Get an Interest Free Loan

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.


All You Need to Know About Getting Approved for a Business Loan

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.


How to Get Preapproved for a Loan

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.



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.


The Yellow Brick Road To Higher Ed May Gain More Potholes

It’s spring time, which brings with it warmer weather, spritely green leaves, April showers, beautiful flowers, and Congress’ new tradition of bantering back and forth about the interest rate for federally subsidized student loans. When this occurred in the spring of 2012, the 3.4% interest rate on these higher education loans was set to double to 6.8%, threatening to—in some cases—double monthly payments for graduates trying to repay their financial obligations. Luckily, Congress and President Obama reached a deal that solved the crisis in the short term, essentially staving-off the threat of the interest rate increase for a year.

And here we are in April of 2013, and the same financially crushing prospect looms over many who opted for those federally subsidized loans. The current interest rates are scheduled to double on July 1st of this year. Imagine currently having, for example, a $200 per month student loan payment (which is on the very low end of the payment spectrum—most student loan monthly payments are much more) and now it’s threatening to balloon to $400 per month. That’s a serious financial crisis for the average, middle class wage earner. (Assuming s/he was even able to get a decent wage job after college graduation…) And if that wage earner happens to have a family to support on that middle class income, this increase becomes a full-blown, four-alarm emergency of a financial situation.

President Obama, hoping to avert financial catastrophe, has made part of his yearly budget a proposal to deal with the interest rate on federally subsidized student loans on more of a long-term basis. The idea has some elements in common with Senate Republican’s plan for dealing with calculating student loan interest rates. In a nutshell, the proposal would tie student loan interest rates to the yield on 10-year Treasury bonds, plus a few percentage points. The exact amount of extra percentage points would directly depend on the type of loan. For example, for subsidized Stafford loans, the rate would be calculated by adding the 10-year Treasury bond yield to 0.93%; for unsubsidized Stafford loans, it would be the 10-year bond yield plus 2.93%; and for PLUS loans—which serve grad students and parents—the rate would be the 10-year bond yield plus 3.93%. This longer term approach would actually put the interest rate for many of these types of loans below the current interest rates, mainly because interest rates are at all-time lows right now—thanks to a lagging economy. However, once the economy truly begins to pick-up steam, those calculations would cause interest rates to eventually rise above what college graduates are currently paying in interest. So, taking the long view, the proposal is great for borrowers in the short term, but gets rather hairy down the road.

student loan interest rates

Student advocacy groups widely criticized the interest rate proposals amid concerns that there is no cap at which interest rates would top-out, meaning that the rates could conceivably reach never-before-seen heights under the long-term proposal. It’s interesting to note that the President’s interest rate plan also calls for an interest rate cap for low-income students, while the similar Republican plan—put forth by Senators Burr of North Carolina, Coburn of Oklahoma, and Alexander of Tennessee—would not make this distinction in interest rates between low-income and middle to higher income students.

The bottom line, if you’re shopping student loans, currently in college knowing you’ll soon being paying on those loans, or are currently paying on a student loan, is to pay very close attention to the terms to which you sign on. Shop around to look for the best rates (which, interestingly enough, are usually with the federally backed student loans). If you’re stuck in a loan with disadvantageous rates, look into refinancing through another lender. In the long run, facts like higher student loan interest rates could have a serious impact on higher education in the form of changing what many college students choose for their majors, perhaps dumping their more idealistic plans of becoming teachers, social workers, or other public servants for the reality that they need to choose career paths that will, in fact, yield a tangible job, as well as yield an income with which they can meet their student loan obligations. Goodbye, yellow brick road?


Student loan consolidation offers a relief from your multiple student loan debt woes

Just at a time when the entire nation has been worried about the soaring credit card debt level, there came rumors about the next big crisis, the student loan debt crisis. The rising educational and tuition costs among the US colleges is forcing the students and the parents to take out student loans with which they can complete their college education and grab their degree. Student loans are primarily of 2 kinds, private and federal. The private ones are those that are lent by the private student loan lenders and the federal are those that are lent by the US Department of Education. While it is difficult to consolidate the private student loans, it is pretty possible to combine your debts into a single monthly payment. Do you want to know how? Check out the multiple benefits of combining your federal student loan obligations through a direct debt consolidation loan.

  • Various flexible repayment plans: As the borrowers of the student loans are usually students who live on fixed income level, the US Department of Education offers different flexible repayment plans for them to repay the loan with ease and without defaulting on the other debt obligations. The most common debt repayment plans offered are Income Based Repayment Plan and Income Contingent Repayment Plan. The student borrowers are even given the option of changing from one plan to another according to their changing financial needs. This can be a huge relief to the students who are struggling with their student loans.
  • The interest rates will be lowered: When a student starts defaulting on the student loans, it is basically due to the interest rates. The rates remain high in accordance with the income that they make in a month in the form of allowances. This is the reason why a direct debt consolidation loan will benefit as this will drastically lower the interest rates on the student consolidation loan. Revised rates will also mean revised monthly payments and this will imply a considerable amount of savings every month.
  • Single outgoing monthly payment: When you took out multiple student loans, you had to remember the due dates of multiple lenders. But when you take out a direct debt consolidation loan from a single lender or the US Department of Education, you just have to make a single outgoing payment towards this institution. Therefore you can relieve yourself of the hassles of making multiple payments to multiple creditors.
  • Extended repayment term: The term of the direct debt consolidation loan will also be extended throughout a longer period of time to ensure lower monthly installments throughout the term of the loan. So, the borrower can even save money this way.

Therefore, if you don’t want to contribute to the rising student loan debt burden in the US, ensure getting them combined through the direct debt consolidation loan lent by the US Department of Education.


Efficient ways to make student loans repayments

Most of the recent graduates are struggling much to repay their student loans. In this hard economic times finding a job have become a daunting task and so student loan repayments too. This post will help the students to manage their student loan debt effectively with the most efficient ways.

paying back student loans

Know Your Loans

Most important thing you need to consider when it comes for student loan repayments is you need to know your loans. Try to list all the student loans you have federal and private student loans, calculate how much you have borrowed, how often you have to make payments etc. Upon getting the loan ask your lender whether you will be getting any special credits when you make the student loan repayments on time and whether they will offer you any relaxation in the interest rates. For instance many private student education loan lenders used to offer 0.5% of reduction from their interest rate when you allow them to get an automatic withdrawal from your bank account.

Stick to the Standard Payment Plan

Most of the private student education loans come along with an option for paying back student loans through various payment plans. Like deferment plan, graduated repayment plans and many.

In deferment plan will offer you a relaxation in paying your loan when you are unemployed or working in some nonprofit position.

Some lenders offer you student loan repayment program like graduated repayment plans if you have enrolled in yourself in such plans you will be required to make some larger payments when your income goes high.

If you prefer to choose the student loan repayment program like interest only payment you will be required to pay off only the interest rate at the specified time but after that you need to start pay off the interest plus principle amount.

So try to stick to the standard repayment plan for paying back student loans.

Make Payments on Time

For all young adults student loans serve as a very important line of credit which plays a very important role in your credit score. So you should pay enough attention on repaying your student loan payments on time. Even 1 or 2 days of late payments can hot your credit score really bad. So every month schedule your financial payments and provide first priority to your student loan. If you feel like you are unable to make the on time payment because of your financial difficulty, it’s better to call them before the due date and check out whether you can have any different payment plan to repay your student loan.

Pay as soon as possible

Since your student loan will continue to accrue the interest rate it is good to pay off your student loan amount as soon as possible else you will end up with mount of capitalized amount to pay off. Whenever you have some extra amount on your hand you can consider paying the student loan instead of buying some special things for yourself. It will help you in paying back student loans much sooner.




Why You Should Qualify For Subsidized Student Loans

Are you struggling to pay off your high educational costs? You can look for some federal government student aid program to help you in the place. These loans usually accrue the interest rates till you pay back the loan amount. 2 most common type of federal loans which assist the US students are Federal Stafford loan and Perkins loan. Out of these 2 Stafford loan is easier to obtain. These loans neither require you produce a co signer nor your credit history. All it considers to provide the loan is “your financial true need to obtain the loan”.  The loan amount you can be allocated depends on the factor whether you are dependent on your parent or independent one. If you are an independent one then you can make yourself avail for some larger amount. Government will pay of the interest rate as long as you are in school.

Perkins loan amounts are allocated to the schools and universities. So when you apply for the loan it is your school or the university which determines your eligibility for the loan program. It will infer the data you have entered in your FAFSA application form. You should prove your financial need against of all other students to obtain this loan. Perkin loans are offered with low interest rates.

When you apply for the loan you may or may not get qualify for the subsidized student loans. Perkin loans and subsidized Stafford loans are beneficial. Interest rate will be added up to your principle amount but the federal government will take care of this interest when you are in school. But in the UN subsidized loans students need to make their monthly repayment or they can let the interest rate to be added with their principle amount and can pay off later.

Both Stafford and Perkins loans can be subsidized but you need to demonstrate your financial need against of all students who have applied for the same loan. When you get qualify you will not accrue any interest rate with your loan until your graduation.

When you apply for subsidized student loans it is given with the faith of you will find a job when you come out of your school. Through this job you can make a loan repayment. Grace period ( the period that exists between when you come out of school and before start of repayment term) for Stafford loan is 6 months and the grace period of the Perkins loan is 8 month. When you do not find a job in this period you need to utilize the time to apply for the deferral.

Student loan deferment

To get approval for the Deferrals you need to prove that you cannot find a job after finishing your graduation but you also need to demonstrate that you are trying though. If you have started to repay then you lose the job accidentally still you need to demonstrate this economic hardship. Student loan deferment period is 3 years. If your loan is subsidized one then you don’t need to pay off the interest in this period else interest rate will accrue but you can again pay off the interest alone in this period or you can let that to be capitalized.


Suppose your application for the deferment get fails to qualify you can apply for the forbearance.  In this either you can just stop paying back the student loans or you cut down on your interest rate and lower the repayments. However regardless of your loan is subsidized student loan or non subsidized student loan you need to pay the interest rate.


How To Consolidate private student loans

Education has become an expensive endeavor nowadays. Most of the students manage to get their educational fee through government educational aid programs. Although portion of students are receiving their scholarship to pay off their educational fee, rest of the students who can’t qualify for the federal loan program need to apply for private education loans. These private education loans impose high interest rates on the students who get qualify for their loans. When the student passed from the college this amount comes as a big burden. Especially when the student is unable to find a full time employment which provides sufficient income to pay off their loan repayment the situation get worsen. In these cases consolidating private loans can help the students in their monthly repayment.

When the student Consolidate private student loans they will get the reduced monthly payments with the low interest rate.

Given below are some of the seven steps which help in Consolidating private student loans.

List out all your outstanding private student loans

Before starting with the Consolidation student loans you need to be clear with the total loan amount you owe, loan interest rate of each one and their monthly repayment amount. Sort these loans based on the interest rates from the larger pone to the smaller one. It will help you in determining the priority. When you can’t consolidate private student loans try to pay off the student loans first that needs more interest rate. This can save you significant dollars in the long run.

Review the terms

Few private loans have the terms like when you repay the loan quite earlier than the agreed term you need to pay certain amount as penalty. So check out your every private student loan and review the penalty fee if any. Notre down the penalty fee of each private loan separately.

Review your credit report

When you apply for the Consolidation student loans your 3 digit magical credit score will play an important role in determining your interest rate. So make sure your credit report is up to date. Before applying for loan consolidation get the credit report from all 3 credit agencies and review it carefully. Note down the errors and fix all the discrepancies. If you have already pay off any debt but it dint get reflected in your credit report you need to contact the respective credit agency to clean up your errors. Removing this incorrect item can help improve your credit score up to 30 points. So make sure your report is error free and it indicates your true credit status.

Find out your objectives for consolidating private student loans

Try to figure out what is your main objective of the student loan consolidation.

If your objective is to reduce and to lock your interest rate in some low level and you have a home under your name or your parent’s name you can consider the home equity loan.

If your objective is to reduce the monthly payment as an affordable one then you can find a loan program which offer long loan repayment with the low interest rate. But when you take longer to repay the loan your repayment total interest will get increased.

Decide on the suitable consolidation loan lender

Once you get clear with the consolidation objective shop around and various compare lenders from the aspect of loan interest rates, term of cost and all other possible benefits.

Once you all the lenders to consolidate private student loans pick out few of them based on the analysis and try to contact each of them. Based on the initial sessions you had and the terms sign up with the lender for private student loan consolidation.



Possible ways to get Student loan relief

As the years passed on your college life have come to an end. Now it’s time to repay your loan.  If you face a hard ship in repaying your student loan below ideas can help you to bare the minimum.

Even though the monthly payment is very high than you afford as a student you must repay your student loan according to your promises. So try to plan everything before your first repayment due comes and stand in a row.

You should find out a legitimate way to repay the loan. Defaulting on the student loan is not a very good route you can take up. If you can find some other way to repay your loan go for it. If you default in your loan definitely it will greatly affect your credit history. It will result in many financial troubles in future. Most of the students prefer to file for the bankruptcy to get rid of from the student loans repayment. Remember only in rare circumstances it will help you in the reduction of your student loan. It will not give you a student loan relief.

student loans repayment

Consider student loan consolidation

One of the proven and most effective ways to pay off the student loan is approaching the student loan consolidation companies to consolidate your loan. They will help you to consolidate all if your student loans into one manageable debt with the affordable monthly interest payment.  When you obtain a single student loan it will still help you by reducing your monthly payments. But the term will be extended. You can extend the student loan even up to 30 years. But if you calculate the consolidated loans you can find it increases your overall student loan amount. This is far better than defaulting your student loan.

Student loan deferment or forbearance

One other choice which is available for student loans repayment is applying for the Student loan deferment or forbearance. It will help you to postpone your student loan repayment to some future dates.

Student Loan Deferment

Applying for the Student Loan Deferment will help you to postpone the student loan interest and principle to the later date. You can make it happen in certain circumstances. This includes enrolling yourself in part time colleges, active military duty or facing the hard tome in finding any full time employment.

Student Loan Forbearance

When you have not succeeded with your Student Loan Deferment application you might become an eligible student for receiving the forbearance. As per law, when the student is under his forbearance he don’t need to meet any of his financial obligations. But keep in mind your interest rate on the loan is keep on compiling with your principle amount. It is definitely an added burden when you need to repay the loan. So find some ways to pay off your loan as quickly as possible. Else you will be multiplying your mount of debt and it will get even worse in your future.

private student loan forgiveness

If you get fail in all your attempts to get student loan relief final way you can try put is applying for the private student loan forgiveness. To get this you should have made nearly 120 student loans repayment in the consecutive months on time. However this opportunity is not made available for the new student loans. Doors may be opened in future. To get qualify for this forgiveness you should have a full time employment in some nonprofit position.