Refinance Your Student Loans After Graduate

If you’ve just graduated from college, you’ve probably got a number of different student loans, all in different amounts from different lenders at different interest rates. Loan consolidators (which can be private banks, lenders or government agencies) pay off all your individual loans in exchange for a single loan in the same amount issued to you. So now instead of all those different loans, you’ve got one loan that you repay to the consolidator.

If you’ve recently graduated from college, you’ve probably been bombarded with mailings and advertisements urging you to refinance (or consolidate) your student loans right away. But wait, what is loan consolidation? And why should you do it?

Refinancing your student loans reduces your monthly payments and locks in a fixed interest rate. In most cases, student loans have variable interest rates set a few points below prime. As interest rates go up, so will the interest rate on your loans. When you refinance your loans, you lock in an interest rate based on the current market conditions that will be set for the life of your loan. Therefore, it’s important to evaluate the market before making the decision to consolidate. Right now, interest rates are low, but they’re going up and most economists predict that they’ll continue to go up for awhile. So for many people, this is a good time to refinance.

Your credit history will also determine your eligibility for loan consolidation programs. Loan consolidators can be picky in who they accept for their programs, so the option to refinance is usually only available to individuals who have established good credit by paying their loans back on time. If you’ve missed payments or made payments consistently late, you may not be offered the best terms, if you’re accepted at all. If your application is denied the first time, call the consolidator and talk to a loan officer about the reason for your rejection. The officer may offer you advice on how to qualify for their program at a later date.

If you decide to refinance, be sure to consolidate federal loans and private loans separately from each other. When you consolidate your loans, you’re typically offered a rate that’s 1-2% lower than the average rate of your loans. Federal student loans often carry much lower interest rates than private loans, so consolidating them together can bring up the average interest rate of your loans and leave you with a higher fixed rate locked in. If you only have one private loan, it may not make a difference, but it’s important to assess your options before committing to refinance.

Is there anyone who shouldn’t consolidate? Let’s look at a scenario. Tracy has 2 loans for $5,000 each that are scheduled to be paid off within 5 years. She can afford to make her monthly payments but wants to see if she can save a little extra cash each month by consolidating. She finds out that she can refinance the loans into a $10,000 consolidation loan to lower her monthly payments and she’ll be eligible to extend her payments over 8 years. But because she’s extended the life of her loans, she’ll be paying interest over a longer period of time and may wind up paying more overall than if she had kept her loans as they were.

It is tempting to pay less per month but if you can afford to pay off your loans in a shorter period of time, then you’ll likely save money on interest in the long run. Obviously every situation is different and you won’t find all your answers in a short article like this. But if you think loan consolidation might be right for you, check out the Student Loan Network’s site at Studentloanconsolidator.com for more information or speak with a loan officer or financial planner to see what your options are.

Simple and Free Student Loan Advice And Information

Student Loans

For many students, the dream of getting a higher education just isn’t possible without the financial aid of a student loan. Fortunately, there are many opportunities out there to apply for and receive a student loan. And even better, Student education Loan is here to give you all the knowledge you need to choose the best student loan for you.

Student loans generally come from two sources: the federal government and private financial institutions, such as banks. Both require repayment of the loan, but that’s where the similarities end. Let’s take a look at both federal and private student loans.

Federal student loans are sponsored by the government and account for the biggest chunk of education loans. There are three main federal loan programs: The Perkins Loan, The Stafford Loan, and The Parent Loan For Undergraduate Students, also known as PLUS.

The Perkins Loan is the most affordable student loan, with an interest rate of 5% and low fees. But it’s also the hardest to get because it’s only given to those who need it the most. And the loan limit, at $4000, is the lowest of all three federal student loans.

The Stafford Loan comes with a variable interest rate that’s higher than the Perkins, but lower than the PLUS Loan, due to the cap at 8.25%. As with the Perkins Loan, this student loan does not hold credit worthiness against the applicant. The Stafford Loan also has a much higher loan limit and is offered to both graduate and undergraduate students.

Compared to the Perkins and Stafford Student Loans, which are borrowed in the student’s name, the PLUS Loan is completely different in that it is a loan for parents of dependent undergraduate students. A big advantage of this type of student loan is that it covers any remaining balance not covered by other forms of aid – in essence the loan limit covers your entire educational expense.

Now that we’ve familiarized ourselves with the different types of federal student loans, let’s identify the attributes of a private student loan. This is a loan from a financial institution that takes into account your creditworthiness, not your need for aid. Your credit is reviewed by lenders and if approved, you can get a substantial size student loan in minutes, sometimes up to $30,000. A downside to private student loans is that repayment terms typically cap at 15 years, compared to 30 years for a federal loan. Also, if you become disabled or deceased, your heirs are required to payoff your student loan, whereas in a federal loan, the loan is forgiven, making repayment unnecessary.

As you can see, you have several choices when it comes to student loans. Making sure you choose the best option is a matter of getting informed on these choices, and picking to student loan that best fits your needs.

Why Use Bad ? When You Can Get Best Private Student Loan

Students who do not meet federal requirements for financial need can use the route of a private student loan. Apply for a private loan is free. The loan is based on the student's creditworthiness and not the need for aid as does the federal loans.

Many lenders offer private student loans to students or their parents and the application process is simple and free. The loan requirements are usually less stringent and the repayment options are affordable for young professionals. A private student loan is a great way to finance the education of any student that needs financial help. Below you will find things that you should know and things you should consider.

Things You Should Know:

1. Student loans can be used not only to pay the fees but also for lab fees, dues for associations and housing.

2. A student can have an educational loan even though the tuition is covered by a grant.

3. A student who is eighteen years or above in age, can apply for a student loan.

4. Most of the student loan is deferred for repayment until the student completes the education or leaves the school.

Things You Need To Consider:

1. Private loans for students are not given without a co-signer or a credit report.

2. Credit unions give student loans if a vehicle or a boat is provided as collateral.

3. During the cumulative credit period, a student has the option of paying or not paying the interest part of the loan. It should be noted that paying the interest on the loan while attending school will significantly reduced the amount due when the student starts paying the loan after leaving the institution.

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

It is not difficult to finding lenders, because most financial institutions offer some form of student loan.

Always take the time to investigate lenders in your immediate area and find out exactly what kind of loans they offer. Compare the different interest rate and terms to get the best offer available.