Guide For Student Loan Consolidation

Student loan consolidation, also known as student loan refinancing program, can be termed as an effective debt clearance strategy. Apart from clearing the debt, a student can also save a good amount of money through student consolidation loan since this loan is offered at lower interest rates and requires the student to pay lower monthly repayments. However, one needs to consider certain facts while opting for a student consolidated loan.

Financial Counseling:

Consolidation loan is not the only solution for student debt management. There are other viable options that can be used as an alternative. Information about these options is available with the financial-aid office. Hence, it is important for students to consult a financial counselor before considering a student consolidation loan.

Refinancing during grace period:

Federal loans such as Stafford loans provide students with a six-month grace period. This grace can be availed even after the student has graduated from the school. Loan repayment starts only after the grace period has ended. This is the right time to consolidate a student loan as the interest rates during the grace period are far less than the rates after the expiry of the grace period. Once the student is employed, interest rates are determined based on the income.

Lender Initiatives:

So as to sustain in the market and be competitive, several financial organizations and private lending firms offer a variety of packages and promotional offers so as to attract customers. Some of these include reduced interest rates, flexible repayment options, reduction on on-time payments and auto debit option. Since, there are several lending firms providing consolidated student loans, it is better to shop around so as to get the best deal.

Another useful strategy is to opt for a variable interest loan during the initial years. Once the interest rate decreases to a considerable level, the variable interest rate loan can be switched to a fixed interest rate loan. Federal and private student loans should never be combined while opting for a consolidated loan. Under certain exceptional situations, students with Perkins loans are not required to pay back their loan amount if they work for a prescribed number of hours in professions such as teaching or community service.

California Bad Credit Mortgage Loans – 3 Things to Avoid When Applying for Home Loan

If applying for a mortgage loan with poor credit, there are steps you can take to help get a better rate. Granted, if your credit score is low, the likelihood of getting a prime rate is slim. Still, reasonable rate bad credit mortgage loans are available. As a homebuyer, you must be willing to research various lenders and compare different loan programs. Moreover, homebuyers should avoid maneuvers which could hurt their chances of approval.

Avoid Late Payments When Applying for a Mortgage

Even if your credit score is good, the occasional late payment is common. If planning on buying a home, it is important to establish a good payment history with creditors – before applying for a home loan. Mortgage lenders understand that situations occur which make it difficult to pay bills on time. However, if hoping to buy a home, it is important to begin creating good credit habits.

Many lenders approve mortgage loans to people with several late payments. Yet, these persons pay higher rates. To avoid an increase in mortgage rate, attempt to submit all credit card and loan payments on time. If possible, adopt new payment habits at least twelve to six months before applying for a home loan.

Limit the Number of Credit Inquiries

A common mistake made by some homebuyers is allowing several mortgage lenders to pull their credit. Shopping around for a home loan is smart. However, if comparing three or four individual lenders, do not consent to having your credit checked. Instead, request no-obligation quotes from lenders.

Try using one of ABC Loan Guide’s Recommended Bad Credit California Mortgage Lenders.

Quotes do not involve credit checks. However, buyers must provide an accurate credit description. To do so, it helps to obtain a copy of your personal report online, which does not count as a credit inquiry. Once the lenders remit a quote, compare the different offers and choose the loan with the best rates and terms. Next, complete a mortgage loan application. To finalize the loan approval, the chosen lender will pull your credit.

Avoid Opening New Credit Accounts

When applying for a mortgage loan, it is important to maintain a low debt to income ratio. Obtaining new credit lines and applying for a mortgage is a bad idea. For example, if you buy a car before your mortgage loan is finalized, this will increase your debt to income ratio. This could affect whether you still qualify for the approved loan amount. To avoid the hassle of having to re-qualify for a mortgage loan, postpone opening new credit accounts until the loan closes.

Federal Student Loan Guide

After reading over some of my previous posts, I decided that it may be a good time to start at the beginning seeing as I never really did. I’ve given suggestions on how to curb average college graduate debt but in all reality some students and parents alike may be wondering what kind of loans there even are for college educations.

1. Stafford Loans

Federal Stafford Loans are loans offered by the Department Education to help subsidize your personal and families resources. They also cover above and beyond scholarships, work study, and grants. Almost all students can get Stafford Loans no matter what your credit score is or other financial problems you may have had in the past. There are both Unsubsidized and Subsidized loans, both of which, are guaranteed by the Federal Government.

Below are the Stafford Loan Limits throughout your college career.

Stafford Loan Limits

Dependent Students Annual Loan Limits
First Year $5,500 ($3,500 subsidized/$2,000 unsubsidized)
Second Year $6,500 ($4,500 subsidized/$2,000 unsubsidized)
Third Year and Beyond $7,500 ($5,500 subsidized/$2,000 unsubsidized)

Independent Students Annual Loan Limits
First Year $9,500 ($3,500 subsidized/$6,000 unsubsidized)
Second Year $10,500 ($4,500 subsidized/$6,000 unsubsidized)
Third Year and Beyond $12,500 ($5,500 subsidized/$7,000 unsubsidized)
Graduate or Professional $20,500 ($8,500 subsidized/$12,000 unsubsidized)

Lifetime Limits
Undergraduate Dependent $31,000 (Up to $23,000 may be subsidized)
Undergraduate Independent $57,500
Graduate or Professional $138,500 (Up to $65,000 may be subsidized)
or $224,000 (for Health Professionals)

2. Parent PLUS Loan

A Federal Parent PLUS Loan is a loan that parents of dependent students can apply for to help pay for the remainder of school that the financial aid package did not cover. It can cover up to the full cost of the student’s tuition. Parents must pass a credit check to be approved for this loan, the only way around it is to get a friend or a relative to guarantee the loan. I would not suggest this for anyone.If someone asks you to do this, who is not your own personal child, you are setting yourself up for disaster. As of right now the interest rate for this loan is a 7.9% fixed rate. This loan is a 10-year loan and it is required that you must pay at least $50 a month and repayment begins 60 days after the full amount of the loan is dispersed.

3. Federal Perkins Loan

A Perkins Loan is a federal loan given to undergraduate and graduate students with exceptional financial needs. It has a low interest rate at 5% and unlike other loans, it has to be applied through the student’s financial aid office at their school. Depending on what amount you need for school, the amount per year that an undergraduate student can obtain is $4,000, with the maximum amount allowed total per student is $27,500. For a graduate student, the maximum amount per year is $8,000 and $60,000 total which would include the undergraduate amount requested previously.

4. Graduate PLUS Loan

The Graduate PLUS Loan is almost exactly like the Parent Plus Loan except for the fact that it is for a Graduate Student to apply for. The Graduate PLUS loan is a fixed rate interest rate at 7.9%. Graduate students must apply for this based on credit scores and not on a need basis. The loan allows graduate students to apply for the loan for tuition, room and board, books, lab expenses, minus any other aid that the student is currently receiving. Payments can be deferred while you are currently enrolled in a program and the interest that is accrued is tax deductible for most graduate students.

This is just a basic overview of some student loans that you can receive or actually obtain. Depending on requests, I will write a more in depth analysis of each topic if people find it helpful. If not, I will leave it like this if everyone would like to research more on your own.