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Understanding How Student Loans Can Affect Your Credit Score

Due to the increasing cost of higher education nowadays millions of students in the USA take one or more student loans to cope their educational expenses. And there is a growing number of students today who find it difficult to pay off their student loans. Educational loan is probably one of the largest debts most of the students have ever had. How you deal with your student loan can have a huge consequence on your credit rating and, given that your credit rating establishes how much you can borrow in the future, on your financial future as well.

You cannot declare bankruptcy for federal loans; these loans still have to be repaid. Going into default with student loans will affect your car loans, mortgage application, etc. However, keep in mind that it isn’t your student loan that has an effect on your credit score, but the way you handle it. How you manage your student loans today will affect your credit score for years to come.

What Is the Credit Score?

Your credit score plays very important role in financial terms. Essentially, it gives a reflection of your financial responsibility to diverse creditors and lenders, to put it in other words, it helps them estimate the level of risk you present as a borrower to them. For instance, if you don’t pay your bills on time, it sends a message that you lack a financial responsibility.

How Your Credit Score is Calculated?

  • Payment History – Your capability to pay your bills on time without fail makes up 35 percent of your credit score.
  • Credit History – 15 percent of your credit score is depending on the length of time you have been using credit.
  • Amount Owed – The amount of debt you owe makes up 30 percent of your score.
  • New Credit – At 10 percent, frequency of new lines of credit opened is also considered.
  • Types of Credit – Also at 10 percent, the different types of credit cards you possess affect your credit score.

How to Effectively Handle Your Debts

Your credit rating stands for the debts you have and your repayment history. The key for a good credit rating is to make regular payments on time and repay the debts as soon as possible. Here are some useful guidelines to help you successfully cope with your student loans and debts.

Early Student Loans Repayment

Repay your loans as soon as possible. The repayment period for most of the student loans is about 10 years and the monthly amount you have to pay is based on this timeline. If you find that you can afford to make these payments, increase your monthly payments and repay your student loan in the shorter period of time. Not only that paying more than minimum payment will help you repay your loan faster, but also will positively affect your credit score.

Refinancing Student Loans

Refinancing your student loan can be of assistance in getting a low interest rate. In addition, with lower monthly payments, you will be able to pay off your loans on time which will positively affect your credit rating.

Making Regular Interest Payments

In case you have taken an unsubsidized federal or private student loan, you may be required to make interest payments while you are still in school. Include this amount into your monthly financial plan and make your payments in time. If you can, try to avoid deferring interest payments after graduation, when they are going to be added to the principal amount of your loan.

Making the Use of a Grace Period

Student loan borrowers usually have a benefit of 6 to 9 months-grace period after graduation, before they are required to start repaying their loans. This time is designated to let them find a job and to gain a regular income. In case you find a job before during the grace period, it is strongly recommended to put some money aside and make larger payments, which will help you to repay your loan faster.

Avoiding Failure to Make Payments

If you find that you have difficulty making the payments of your student loan, the best idea would be to contact your loan lender immediately and try to work it out together. If your lenders find you communicative and cooperative, they will be more willing to help you find the solution. If you are not able to pay the full amount, make effort to pay smaller payments instead. If you miss your payments, your loan will be considered delinquent. This will come as a negative mark on your credit report.

After you start repaying the loan again, your credit score should improve, but your skipped payments will still appear on your record.

Avoid Defaulting on Your Student Loans

If you fall to make your loan payments, your student loan will become delinquent Successive failure to make loan payments or extensive delinquency may lead into student loan default. Default comes about after 270 days of non-payment on a federal student loan or 120 days of failure to pay on a private loan. Under most federal student loans your loan will be put into default after nine months of skipped payments, and for most of private student loans your loan will be put into default after three months of missed payments, though this depend on the specific loan lender. Defaulting on your student loan can leave a mark on your credit record for up to seven years after your loan is fully repaid. This will have a negative mark in your credit score as a consequence.  To avoid defaulting on your student loan, get your loan refinanced.

For most of the students student loans are helpful assistance in their pursuit for higher education. Not your student loans, but the way you handle them can affect your credit rating both, positively or negatively. To avoid student loans harm your credit score the best is to make a repayment plan and start paying off your debts as soon as possible. Avoid going into default under any circumstances and take into account loan options such as flexible repayment plans, grace period, deference and forbearance to make sure that your student loans do not affect badly your credit score.Careful planning and financial responsibility, will help you not to feel overwhelmed by your student loans.

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Examining Wells Fargo Student Loans

The Essential Information

Student loans are type of financial aid to students who cannot afford to pay for their higher education. These loans can be obtained through federal or private lenders. Students can apply either for federal or private loans or for both. If you are thinking of taking a private student loan to support your studies, you should consider applying for Wells Fargo Student Loans since it is considered to be a very safe and secure way of borrowing.

About Wells Fargo

Wells Fargo company with the seat in San Francisco, USA is a one of the leading lending companies in the USA that besides loans, offers banking, investment, mortgage, insurance and other consumer financial options in North America and worldwide alike. It serves online millions of customers all around the world today and gives assistance to large number of undergraduate and graduate students to acquire higher education.

There are numerous benefits Wells Fargo’s borrowers can enjoy and the most important advantages of Wells Fargo student loans include following:

  • Interest rates on your loan are going to be reduced if you make regular payments
  • You can borrow approximately $25,000 every academic year
  • The loan amount is available to parents/guardians without delay
  • Loan repayment can be done in a period of 15 years
  • There are no charges applied for application, origination and loan repayment.

Wells Fargo Student Loan Options

Wells Fargo offers three types of student loans options with different interest rates, repayment options and borrowing terms, but they all are dependent on borrower’s credit.

• Wells Fargo Education Connection Loan

This version of Wells Fargo student loans requires no loan repayment while student is still in school. The annual maximum amount that student can borrow is $25,000. This student loan option has interest rate of 5.68% and you are going to need a cosigner when apply. There is an application fee of 0.02% required with under this student loan option.

• Wells Fargo Student Loan for Parents

Under this student loan plan parent or guardian applies for the loan. Loan is issued immediately and the interest rate is about 3.50%. There is no application fee, but there aren’t graduation benefits offered. The annual maximum amount you can borrow is 25,000 dollars. Loan repayment is parent’s responsibility.

• Wells Fargo Collegiate Loan

This type of Wells Fargo student loans is accessible to fur-years undergraduate students and you are going to need a certification from your school in order to qualify. Your loan will be disbursed directly to the school. This loan type provides the highest loan amount with the cap of $120,000. The Wells Fargo loan option has the lowest interest rate which starts at about 3.40%. You are not required to make payments until you leave the school which gives you an additional graduation benefit of 0.50%. There is no application fee, but the cosigner on application is required.

Wells Fargo Loans for Undergraduate Students

If you are an undergraduate student attending a four-year school and you find that you need to borrow money to pay for your books, tuition, living costs and other education-related costs, we recommend to consider applying for Wells Fargo loans for undergraduate students. With this loan option you are not required to make payments until six months after leaving school, and no origination and application fees apply. You can choose from fixed or variable interest rate; variable rates are offered as low as 2.45% APR and fixed rates at 5.72% APR and you can enjoy a repayment discount benefit of up to 0.50% interest rate reduction.

To qualify for Wells Fargo loans for undergraduate students, you must:

  • Be enrolled undergraduate or graduate student seeking degree at an eligible school;
  • Have a cosigner;
  • Be a US citizen, US national, permanent resident or international student with a temporary resident status. In the last two cases a US citizen cosigner is required.

Wells Fargo Loans for Graduate Students

This group includes graduate, MBA and Health student loans. The main benefit of this type of Wells Fargo student loans is that you don’t need a cosigner when you apply for the loan. In addition, you can choose between fixed and variable interest rates options and variable interest rates starts as low as 3.71%, fixed at 5.56%. You will also take an advantage of repayment discount of up to 0.50% interest rate reduction. Furthermore, loan repayment begins six months after you leave school.

To be eligible for this student loan option, you must:

  • Be full-time enrolled at an  eligible school;
  • Make continuous academic progress in an eligible program;
  • Have a good credit history and
  • Be a US citizen, US national, permanent resident or international student with the temporary = resident status. In case you are permanent or temporary resident, a US citizen cosigner is required.

Wells Fargo Bar Exam Loans

This student loan option is offered to law students looking for finances for their examination expenses and related costs. There are variable and fixed interest rates offered; variable rates with the interest of 6.61% and fixed interest rates of 8.47%.

There is available discount of 0.50% interest rate reduction in repayment. The maximum loan amount offered is $12,000.

Wells Fargo Repayment Plan

There is a grace period of six months after student leaves school and you will be allowed to start your repayment after that period. There is an auto pay program offered, which means that its debits the money for the payment from your bank account or you can even choose an online payment option.

Wells Fargo Uncertified Student Loan

Lots of students seek for Non Certified Student Loans since they find them beneficial in several ways. These loans do not require any authorization from your college or university in order to get the loan, they offer much higher loan limits than Certified Student Loans and you can attain the whole loan amount at once. Their main drawback is related to rather higher interest rates.

Wells Fargo offers Uncertified Student Loan opportunity and in order to apply for uncertified Wells Fargo student loan, you need to have an excellent credit history. However, you may still need a creditworthy cosigner. In case you are planning to obtain Wells Fargo uncertified student loan, it is strongly recommended that you borrow a reasonable amount and repay your loan in a rational period of time.

Summary on Wells Fargo Student Loans

Generally speaking, the Wells Fargo student loan is a great opportunity for those looking for private student loan options. It is easy and convenient online loan borrowing alternative many students today take advantage of. However, before you apply, make sure that you’ve checked out all the other financial student aid options available.

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Examining No Credit Check Private Student Loans – How to Get It

The reality of getting a no credit check private student loan

Student loans are a type of student financial aid provided from the federal government or private lenders with the intention to assist students in managing to pay for their college education. Because these loans are adapted to students, most of them have flexible repayment terms and low interest rates that make it possible for college student to pay off the borrowed amount.

When federal student loans aren’t enough or student for any reason cannot obtain this type of financial aid, private student loans can be very helpful in paying for education-related costs. If you are in this category of students, and the private student loans are the only obtainable option, you have to be aware of the fact that is almost impossible to get a private student loan when you have a bad credit. Nowadays credit is playing a large role and credit history takes important place when it’s time to plan your financial aid tactic. If you apply for private student loans, your credit score is going to be used by the loan lenders to determine your loan eligibility. Most of private student lenders offer a loans based on borrower income and credit history and unless these two conditions are met, it is very complicated to find a private loan lender that can provide borrower with the financing him without much of harassment. In case you have no credit or bad credit than you will need a creditworthy cosigner to get your private student loan approved. And since most of the students do not have an established credit history, a cosigner may be required when applying for private student loan. You can apply for private student loan with no cosigner in case you are working and have a good credit. You should be aware that many bad credit lenders who are offering you a no credit loan in fact are probably offering some type of personal loan or even a payday loan. These types of loans are not suitable for students and you should avoid them if possible.

No credit check student loans are loans designated to help students who don’t have a good credit history. There are many loan options that do not take borrowers credit history into consideration when assessing a potential borrower’s student loan application.

Federal Student Loans

The only true type of no credit check student loans are federal student loans which do not depend on borrower’s income and credit and don’t require you to submit a credit check and provide money on need basis. Students can apply for subsidized and unsubsidized federal loans to pay for their college education.  Federal student loans do not require a credit check or cosigner since the loans are guaranteed by the federal government. For the reason that there is no risk involved in lending to student on a federally guaranteed loan, there is no credit needed. In order to apply for federal loan, student first has to fill out the FAFSA application.

Private Student Loans

There are also no credit check private student loans available for students, and they require students-borrowers to have a creditworthy cosigner, which means that he or she need to have a strong credit history. Cosigner can be a family member, a relative or a friend and he/she agrees to pay any debts if the borrower is not able to do that. In addition, a cosigner must:

  • Have credit score over 700
  • Be someone who you know well and can trust
  • Be aware that his/her credit is going to be affected by the loan

If you have repaid some installments of a previous student loan independently, in some cases you would be given the ability of applying with no cosigner or co-borrower and you ensure that the loan repayment will be entirely your responsibility.

How to Improve Your Credit Score

In case you have a bad credit score, there are some things you can do to try to improve it and improve your chances for student loan to be approved. Firstly, you should review your credit report and make sure there aren’t any mistakes and inaccurate information occurred on it. To start fix your credit, you also should sign up for student credit card, make regular payments and put down your present debt.

Think three times before you take your student loan. Before applying, put an effort to learn about all available borrowing options and then choose the one that suits your needs the best. If you are going to take a private student loan, examine all accessible alternatives and try to make the best possible deal.

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Understanding Federal Direct Student Loans Program

Direct student loans are federal educational loans with low interest rates. These loans are provided by the US Department of Education with the intention to help students and their parents to pay for postsecondary educational expenses and usually cover tuition costs as well as additional expenses like transport, books, food, accommodation, etc. Direct Student Loans should not be confused with uncertified student loans, which are regularly characterized as direct-to-consumer loans.

The main benefits of Direct Student Loans are following:

  • Low interest rates;
  • Student borrows money directly from the federal US government, without third-party lender such as bank or financial institution;
  • Borrower have the opportunity to choose from numerous repayment plans which can be switched at any time, if the borrower needs a change;
  • Borrower has online access to his or her Direct Student Loan account information via his servicer’s website.

As it was mentioned before, the lender of Direct Loans is the Department of Education. Before the passing of SAFRA (Student Aid and Fiscal Responsibility Act) in 2010, federal loans for students could be offered as a part of the Direct Loan Program or the FFEL (Federal Family Education Loan) program, but SAFRA basically eliminated FFEL Program, and now most federal student loans are offered through the Direct Loan Program.

The four main types of federal student loans are:

  • The Subsidized Stafford Loan
  • The Unsubsidized Stafford Loan
  • The Direct Consolidation Loan
  • PLUS Loans

The Subsidized Stafford Loan

The Subsidized Stafford Loan is offered as a financial aid for students in who are proved to be in financial need, and it can be obtained without charge of interest during the time student is enrolled in school and during grace period and approved deferment periods after graduation.

The Unsubsidized Stafford Loan

Unsubsidized Loan is not based on student’s financial need. This loan option offers a choice to borrow of paying the interest while still is enrolled in college or university as well as during grace period and deferment period or can choose to accept for the interest to be added to the principal amount of his student loan.

For the both of the Stafford Loans student can apply via the completion of FAFSA.

The Direct Consolidation Loan

The Direct Consolidation Loan is category of loan which allows borrower to replace multiple student loans with just one. The Federal Direct Consolidation Student Loan Program lets borrower to consolidate most federal loans.

The Direct PLUS Loan

The Direct PLUS Loan is federal student loan for parents of the depending students intended to assist parents to pay for their child’s school expenses. To be eligible for the Direct PLUS Loan parent and student must meet certain requirements: must be the U.S. citizens or eligible non-citizens, parent must be the biological or adoptive parent, and in good standing with earlier loans and the student-depending child must be enrolled at least half-time at school participating in the Direct Loan Program.

Student loans provided under the Direct Loan Program will also require that applicants sign a Master Promissory Note (MPN) that will serve as a guarantee of their ability to repay the loan.

To sum up, the Direct Student Loans are federal education loans offered by the US Department of Education. Therefore, loan comes directly from the federal government, without involvement of third-party lenders like banks or financial institutions.

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How to Appeal a Student Loan Denial from Sallie Mae – The Essential Information

Educational expenses have been rising considerably over last decade and for a large number of students nowadays the only possible way to acquire higher education is to take a student loan or some other type of financial aid. Lots of students realize one or more federal or private student loans in order to pay for their college or university education. These loans are based on credit history, income, tuition fees and student’s needs and millions of students in US today are granted such educational financial aid. However, it happens sometimes that applicants receive a denial notification on their loan application based on criteria such as bad credit history or employment status.

Sallie Mae is one of the US largest private student loan lenders operating since 1972.  It is one of the leading America’s education loan lenders due to its low interest rates, advanced repayment options and numerous loan alternatives. And very important fact for those unlucky ones who have been denied their student loan, Sallie Mae has an appeal process option. That means that applicants who have been denied, but who believe that their loan has been rejected because of credit reporting errors or in the event that certain mitigating conditions apply, may appeal their student loan denial.

Here is some useful information to help you go through the appeal process.

First to be considered are some facilitating circumstances of student’s denied loan application as follows:

  • Temporary job loss
  • Medical emergencies
  • Temporary credit aggravation due to divorce
  • Disputed credit record based on a billing error
  • Natural disasters like earthquakes, tornadoes, hurricanes, tsunamis, etc.

In case you require appeal on student loan denial with Sallie Mae, keep in mind that you are going to be required to submit adequate third-party documentation as a verification of the events that caused your bad credit history.

If your Sallie Mae education loan is denied and you believe that you have good reasons to overturn that decision, you should without delay request appeal on your student loan denial. With the intention of helping you in this process, here is the list of succeeding steps that you should take:

  1. First you should do is to contact Sallie Mae via phone at (800) 695 3317. All applicants are invited to appeal via this phone number, because there is no appeal form to fill out available.
  2. Talk with the representative and present him/her your reasons for appealing. If they find it a reasonable explanation, they will pass your information onto the credit sector for further review.
  3. It is probable that Sallie Mae will invite you to provide a third- party documentation to help support your claims. If this is the case, you will be invited to send supporting information to them via one of the following Fax, Mail or Email.

You should take into account that Sallie Mae student loan appeal requests are evaluated on case-by-case basis and that your appeal will not be automatically approved. Appealing process takes some time and it could take up to a week for your application to be reviewed and a decision on your appeal to a student loan denial to be made.

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Common Student Loan Scams and How to Beat It

These days, going to a college for most of the students is not easy in the terms of finances. The average student has to pay more than $25,000 for the basic costs of education, not to mention additional expenses like transport, housing, books, etc. For most of the college students it is impossible to afford post secondary education without taking different student loans. At the same time as there are numerous private and federal student loan lenders that student can borrow from, there are just as many scammers out there you should be aware of when considering applying for a student loan. They are looking for making quick money by betraying college students and their parents, and even colleges and government. Achievements in the technology development today, especially Internet expansion make these scams easier than ever. Bear in mind that the student loan scams are flourishing today. Before applying for student loans, college students and their parents must be thoroughly informed about different borrowing solutions, their interest rates and repayment conditions. With the intention of helping you identify and avoid them, we have made a list of the most common student loan scams and the best ways to beat them.

1. Student Identity Theft Scam

This type of student loan scam is the most common one. The point is that the scammers try hacking your personal information like social security number and ID which can be used by other people to get a student loan in your name.

An additional frequent sort of scam is the fake scholarship scam in which companies try to tempt you by offering scholarships that really don’t exist. They use similar logos as accredited universities or even present themselves as government agencies. This type of student loan fraud often involve high amount of scammed money, totaling to hundreds of thousands or even millions of dollars and Department of Education puts hard effort in making sure that loan funds reach the intended borrowers.

To protect yourself, be aware of these and don’t, under any circumstances, give out your personal data if not totally sure about them. Actually, it is the best if you check out their standing throughout your local consumer protection agency.

2. Loan Consolidation Scam

Very often students take diverse loans on tuition, books and other expenses and at some point decide to have their separate loans consolidated and lower their monthly payments, since they find it difficult to pay back these loans separately. Often consolidation terms and conditions may seem complicated and difficult to understand, so lenders may take advantage of borrowers’ lack of knowledge in these matters and persuade them to go for debt consolidation. In fact, they offer false loan consolidation programs that do nothing. The loan consolidation scam is actually about an impostor getting you to split over money, supposedly to cover fake processing, administrative or consolidation charges.

To avoid this type of scam, make sure that you totally understand student loan consolidation conditions and interest rates and choose to consolidate your loans with an agency of good reputation.

3. Offers Which Seam To Good To Be True

Large number of loan providing organizations promotes themselves through different advertisements, internet and phone marketing. If you find advertisements or receive telemarketing calls that sounds too good to be true, they probably are. All the marketing that promises extra low interest rates or to favorable terms and conditions should alert you to be skeptical and careful. To protect yourself, keep in mind a few things:

  • The Department of Education does not send any types of mails, aids and similar advertisement to attract people to borrow money
  • FAFSA is free service
  • Valid student loans do not charge open fees.

4. The Advance Fee Scam

With this type of student loan scam, fake lender offer student loans but tell potential borrowers that they first have to pay a fee in order to secure their loan. The fee usually is about 3-4% of the loan amount. Be careful! In case you receive this type of offer, which requires you to give money in order to get money, it’s probably scam. Legitimate federal and private student loan lending companies do not charge origination fees.

5. The Debt Elimination and Bankruptcy Scam

Under this sort of student loan scam someone will untruly state that they can release your student loan debt – for a price. They will offer you to get your student loans cancelled and ask you to pay a certain amount of money for that service. Don’t answer to such mails or calls! Students can get their loans cancelled only under certain conditions, e.g. if they qualify for a loan forgiveness program under federally issued student loans, such as teacher student loan forgiveness plan, so such claims are a dead giveaway of fraud and you should be very alert for these.

A variation on The Debt Elimination scam is The Bankruptcy Scam, which means that someone will say to you that they can discharge your student loan debt in bankruptcy court. After that they are going to try to get you to pay “legal” fees or other costs related to a bankruptcy filing.

To protect yourself, be aware that dissimilar to credit card debt, student loan obligations can’t be given up for lost in a bankruptcy and don’t involve yourself with offers like these.

As a general rule, you should always carefully check out your potential student loan lender’s reputation and be totally sure that you understand all their borrowing terms and conditions before signing any contract. If you have troubles to understand any information, we advise you to ask for help. Inquire at your college about available student loan options and other financial aid for students alternatives like college grants or student credit cards. There are different lawful and secure options to borrow money for your academic expenses, so don’t get yourself involved in student loan scams by making deals with unreliable individuals or lending agencies.

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Scrutinizing Sallie Mae Student Loans

Financial Aid for Students by Sallie Mae at a Closer View

Sallie Mae or SLM Corporation (originally the Student Loan Marketing Association) is one of the largest private student loan lenders in the USA which offers a great number of loans to undergraduate, graduate and professional students. The company in the beginning provided student loans offered by the federal government under the Federal Family Education Loan Program (FFELP) but nowadays it provides private student loans and it has more than 10 million borrowers. Sallie Mae Student Loans are established in 1972 and have helped millions of people in the USA to reach their goal of a higher education since then. Today, this company is considered to be one of America’s leading private student loans providers because of its low interest rates, the flexibility of repayment, and many loan alternatives.

Sallie Mae Student Loan Options

There is a wide variety of Sallie Mae student loans offered to undergraduate, graduate and professional students and the most popular are Smart Option Student Loan (for undergraduate and graduate students), Career Training Smart Option Student Loan (for undergraduate students), residency and Relocation Loans and Bar Study Loan (for graduate students).

Smart Option Student Loan

This type of Sallie Mae student loan is their brand private student loan and it is intended to be of assistance to both, undergraduate and graduate students. Consider taking this student loan if you are looking for the best private student loan for you. Smart Option Student Loan is school-certified and has low interest rates, offers three flexible repayment options with no starting fees. Also, this Sallie Mae student loan type offers borrowing limit of 100% of cost of education with a minimum amount of $1,000. This borrowing plan is, like the other private loan options, based on credit – you need to have a good credit history in order to apply. In case of a bad credit history, you still can apply, but you need to have a creditworthy cosigner. At present, Smart Option Student Loan has APRs from 2.25% to 9.37%, depending on the borrower’s and cosigner’s credit score.

Career Training Smart Option Student

This loan plan is similar to the standard Smart Option Student Loan with only exception that student must be enrolled in a qualified degree program to be eligible. You are permitted to make interest-only payments during your time in school so as to reduce your payment amount when the definite repayment period begins after you graduate.

Residency and Relocation Loan

The Sallie Mae Residency and Relocation loan is a private educational loan introduced with an intention to help students enrolled in their last of either medical or medical school to pay for academic expenses. To be eligible for this loan you must be enrolled at a qualified medical, dental school or in final year of your studies. Minimum amount that you can borrow at start is $1,000 and go up to $15,000. Which is advantageous is the fact that you aren’t required to make payments while you are still attending school. Another great thing about this borrowing plan is that it can cover nearly any cost associated to school training programs as well as expenses related to traveling to interviews for residences and relocation costs.

Bar Study Loan

This student loan plan is designated to assist students who are enrolled in their last year of law school in paying for all the expenses associated to attending the final law school and especially the costs related to studying for the BAR exam. To qualify for the Sallie Mae Bar Student Loan, you must be enrolled in final year of the study at an ABA-accredited law school or have recently graduated. In addition, you must take the BAR exam no later than twelve months after you graduate. Loan amounts start at $1,000 and goes up to $15,000.

Sallie Mae Student Loans Repayment Options

There are several repayment plans offered under this private student loan like following:

  • the Fixed Repayment option which obliges you to pay just $25 on monthly bases while you are in school and can enable you to save more than 20% on the total cost of your student loan compared to the cost of the loan with deferred payments;
  • the Interest Repayment plan is a great option for those who can afford to make interest payments while still in school, which can enable you to save more than 25% on the total cost of your student loan compared to the cost of the loan with deferred payments;
  • Deferred Repayment plan is the best solution for those students who are not able to repay their loan while in school, since it allows borrower to defer all payments after graduation.

Sallie Mae Student Loans Outline

All above mentioned favorable conditions related to this type of private student loan, like diverse loan options, flexible repayment conditions, the low interest rates, make Sallie Mae Student Loans a leader in private student loans. However, it is recommendable to explore the numerous other borrowing options like Federal Student Loans, college scholarships and grants and other types of financial aid for students before you apply.

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Factors to Consider Before Applying for a Student Loan

Different Student Loans Programs

In developed world today the job market is very competitive and going to college or university increases a person’s chances to gain better employment opportunities after graduating.  A large number of students decide to take a student loan in order to invest in their studies. There are numerous student loans programs nowadays that are intended to financially assist students to pay for their academic expenses. Student loans repayment generally begins from six to twelve months after a student leaves school. Different student loan plans offer diverse terms and conditions as well as specific requirements.  Here is some useful information to figure it out what are the best student loan plans accessible today and how to successfully manage with loan repayment. Some of the most popular available student loan options are Federal Stafford Loans, Federal Student Loans, Federal Plus Loans, Federal Perkins Loans and Private Student Loans.

The Best Student Loans

Federal Stafford Loans

Federal Stafford Loans are fixed-rate student loans for undergraduate and graduate students attending college at least on half-time basis.

Federal Stafford Loans include following types of plans:

  • Direct Subsidized Loans for students in financial need, free of interest charge during the time in school and during grace period and deferment periods.
  • Direct Unsubsidized Loans which are not based on financial need. You can choose to pay the interest while you are in school and during grace and deferment periods or to let it to be added to the main amount of your loan, which will, of course increase the total amount you have to pay off.

The major benefits of this loan plan are low fixed interest rate of 3.40%, increased borrowing limit- up to $20,500 per year and exemption of repayment while student is enrolled in school – repayment begins six to twelve months after graduation. To qualify for Federal Stafford loan program, you must be a U.S. citizen or national, a U.S. permanent resident or eligible non-resident attending a school that participates in Federal Family Education Loan Program and be enrolled in school at least half-time. Federal Stafford borrowers can qualify for the teacher loan forgiveness program if they teach in designated “low-income” schools.

Direct Federal Student Loans

Direct Federal Student Loans are low-interest loans for students. The lender is the Department of education of the U.S.A. With this loan program you borrow money directly from the federal government and have online access to your direct loan account. You are also able to choose from numerous repayment plans. Moreover, you can switch repayment plan if you want. Federal loan program offers the following types of loans:

  • Subsidized for students with proven financial need. These loans are with no interest rate while student is in school, as well as during the grace period and deferment periods.
  • Unsubsidized which are not based on financial need, with interest of 6.8% charged during all periods, including time in school, grace and deferment periods.
  • PLUS unsubsidized loans for the parents of dependent students and for graduate and professional students. Interest is charged during all periods. To qualify for this loan, the parent borrower must be the biological or adoptive parent of the student; must not have a bad credit history; the student must be enrolled at least half-time at a school participating in the Direct Loan Program; the parent and student must be U.S. citizens or eligible noncitizens.

Federal Perkins Loans

Federal Perkins Loan program provides fixed low-interest loans with interest rate of 5% for students who are attending one of participating postsecondary institutions. Students are required to fill FAFSA or Free Application for Federal Student Aid and a Perkins promissory note in order to receive the loan. Duration of repayment period is ten years and the grace period is nine months.

Private Student Loans

Private Student Loans can either complement or replace federal loans such as Stafford loans, Federal Plus loans and Perkins loans. This loan plan is good borrowing option for students who either cannot or don’t want to borrow the money from government programs. Take into account, that when you choose to acquire the Private student loan interest rates can be to some extent higher than with other loan options.

Important To Know

Before taking an academic loan it is very important to be familiar with some essential facts about this type of credit. The much you know about the loan you are going to get involved with, the greater are chances to choose the best student borrowing plan and to repay it easier when the time comes. Here are some useful guidelines to help you with your student loan.

  • In case you decide to attain a student loan online, make sure that the lender you are dealing with is legal, since there are many Internet frauds related to student loans. You can do it by checking the company’s homepage for an address or a landline telephone or, even better, check it with the Better Business Bureau (BBB). In addition, you should search for any reviews available online.
  • Never bond yourself to just one loan plan. Get together a few of loan proposals, compare their terms and conditions and choose one that meets your needs the best.
  • Electronic banking services are very convenient because they enable you to access your money quickly and in the easiest way. Get information on whether or not your eventual lender takes part in electronic banking process and whether you will be able to receive your money to your bank account electronically which will let you avoid a hassle with loans sent via paper checks mailed to your college, which is something that some lenders do.
  • Before applying, make sure that you are aware of all parties involved in the loan process. It may be the case that your potential  lender  uses a service company to take care of the administration of your student loan, which means that taking a loan from that lender may involve paying off the money back to the service as well.

What Are Your Options?

Student loans are created to help students to invest in their education; nevertheless, it can cause numerous troubles if they are not paid in the right way. To avoid going into a huge debt and financial crises, you must be aware of some important issues before applying for a student loan. We strongly recommend to students who intend to borrow academic loan to get as many information as they can on most important questions related to student loans. First, you need to ask yourself a few vital questions.

Can I Afford to Get Involved With Student Loan?

Always be aware of the fact that you are going to make monthly repayments of your student debt, so you need to be sure that you have enough money and that you will be able to make these payments. The best way to secure yourself is to have some savings to cover a few repayments in case the some financial problems occur, e.g. you lose your job or have some unexpected expenses. If your monthly payment overcomes your budget, you will go into the risk of increasing your debts by for instance, using you credit cards to repay the student loan.

Am I prepared for a long-term debt?

You should take into consideration that you are going to be involved with loans for a long period of time and ask yourself will you be capable to handle this. Think about your loan and your options carefully before you apply for it.

Am I informed about the policies or terms of the lender properly?

Never sign any contract without being one hundred percent sure that you understand all the terms and conditions. You have to choose a good plan that will help you to handle your loans. Try to find the best lender who will offer you the best borrowing conditions.

Here are some things you should pay attention to when looking for the best lender.

  •  Focus on Interest Rates

This is something you should take into consideration at first place. Interest rates could significantly vary and you should pay attention to interest rates and the lengths of the repayment offered by diverse lenders and choose borrowing deal very carefully. Furthermore, you should consider that the lower interest rates have longer terms.

  •  Check for Unseen Fees

Always read the contract carefully before signing it. Don’t hesitate to ask questions about anything that seems confusing because it is something that will help you to uncover hidden charges. Ask for help someone who is familiar with this matter to be sure you are making the right decision.

  •  Check Different Rates

There are two kinds of rates, the flexible rate and the fixed rate. The first one changes depending on the situation of the financial system. Quite the opposite, the fixed rate remains the same for the all repaying period, which is good because you know exact amount you are going to pay.

Student loans are helping a large number of students today to gain academic education and invest in their professional future. Although they are undoubtedly helpful, you should be careful and aware of their downsides if aren’t used properly. So, if you find that you need a student loan, consider all the above mentioned factors before closing a deal with your lender.

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Paying Off Student Loans and Available Options

Paying Back Student Loans Alternatives

Student loans are intended to help students pay for university education and all related costs like books, living expenses and other. Because these loans are often supported by the government, they tend to be lower and with more flexible repayment plans than other loans, for instance, credit cards. These favorable conditions encourage many students to take out a student loan. Student loan repayment usually begins from six to twelve months after a student leaves school, regardless of he completed his degree program or not.

With increasing costs of education in many countries today, it is not unusual for young people to hoard student loans while still in school, especially if they have their student credit borrowed from multiple lenders. However, there are numerous repayment options to prevent the cluttering in debts. Here are some useful guidelines on repayment plan and record of available alternatives for paying off student loans to help you make a good repayment strategy.

• Be Familiar with How Much You Owe

If you have borrowed from diverse lenders very useful would be to make a list of all the lenders you are with, how much your debt is, and when the payment is due. Information will set you in position of power.

• Refinance

Another available strategy may be to consolidate your student loans by transforming multiple loans into one monthly payment. This can be beneficial in the terms of getting a better interest rate than you receive in the time of imbursement. Additionally, refinancing can cut your payment significantly and make the loan more inexpensive.

• Standard Repayment

This method is the most simple of all the repayment options available and it means that the lender will take the total you owe, include interest rate and then reimburse it over the time of the loan. After that, they will divide this amount by the monthly payments you have to pay.

• Income-Based Repayment

With income-based strategy your payment will be based on your salary and family size. This repayment plan is created in the way that fits your income. This is a good option if you are just starting to work and your income is low. As your earnings rises, so does your repayment. Major advantage from this plan is the possibility of loan forgiveness, which can be achievable if the scholar works as a volunteer or for a non-profit organization. A drawback to the IBR may be that you have to fill new documentation every year that indicate your current income and family size.

• Income-contingent and Income-sensitive Plans

For self-employed individuals who have their income fluctuated, income-contingent or income-sensitive repayment plan can be most advantageous solution. According to this plans, as the borrower’s income rises and falls, the amount of their loan also does. In fact, income-contingent and income-sensitive plans are very similar to previous IBR and can be considered as it variations.

• Deferring Loan Payment

Deferring loan payment means that repayment term is being repelled without maximizing the interest. This putting repayment off have virtually no negative aspects, besides the fact that you will be delaying your payment due date for unknown amount of months.

• Tax Breaks

Scholars can also benefit from tax breaks. The Government offers help for taxpayers with active student loans and this plan allows you to deduct the interest that you pay up to maximum of $2,500 per year. To qualify for deduction you must meet certain income requirements limits –this limit is less than $65,000 annually for single individuals and $130,000 for couples that have a joint loan.

• Biweekly Repayment Plan

With this arrangement, students will pay half of their monthly payments every two weeks which allows them to make smaller payments instead one large on monthly basis. This mean that you are going to make one more total payment at the end of the year, but that will reduce the time needed to pay your loan off and save you some money on interest.

• Extended Repayment

Another available option is pay off method that will allow you to extend your loan for nearly 30 years. Advantage of extended repayment plan is that you will have to make much smaller monthly payments. On the other side, you will end up paying a lot more in interest during the years. In addition, it will considerably add to the amount of time needed to repay the student loan.

• Graduated Repayment Alternative

With this plan, student’s monthly repayments will be small in the amount at first and then increase over the years. In this way your payment is going to rise every two years.

• Private Loan Repayment Plans

There are a large number of private lenders who offer their programs relating to paying you your debt with student loans. They usually will offer you the standard repayment term, but they also might suggest another plans like extended, income-based, income-contingent or graduated repayment options.

• Another student Loan Repayment Options

Besides all the above listed, there are some other repayment options available for students today.

You can apply for different grants and scholarships to help you out repay you debt with academic loans. The major benefit of them is that you never have to pay them back. Furthermore, you can apply for diverse financial aids like special schooling waivers and grants which many universities and college offer to its students. Though, you may be eligible to qualify for this repayment option only if you have assurance that you are going to work in public interest jobs.

Before Entering Repayment

There are some steps students should follow before they start paying of academic loan, to make this process easier and more successful.

  • Contact your lender to consolidate your loans. Your monthly payment will be taken from the bank account into which they were at firs deposited. In case there is no money into that account, your loan will be considered delinquent and will already be heading toward default.
  • Apply for repayment support. Check out if you are eligible to defer or considerably decrease you monthly payment.
  • Consider loan forgiveness options, for example, for those who are going to join army after the graduation, volunteer in different non-profit organizations, work in social services or teach in low-income communities.
  • Learn about different repayment options like those listed above. You will have a six months grace period after graduation to decide which repayment plan is the best for you.
  • Make a budget and plan your spending to save more money.

These have been some of the most popular alternatives that can be of assistance repaying your student loans. Take time to figure out which one is the most appropriate for you and choose the plan that will help you to pay off your student loan in the way that you consider to be the most convenient.

 

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How to Find Low Interest Student Loans

When it comes to paying for the rising costs of tuition, student loans are the vehicle of choice for many college students. If you are going to be borrowing money from a student loan lender to pay for college or medical school education, you need to minimize the amount of interest that you pay for this loan. Otherwise, you’ll end up paying a lot more than you should for the money that you borrow.

Federal Loans

If you are interested in saving money on interest, you need to consider federal loans. Federal student loans are issued directly from the Department of Education to students. These loans come with interest rates that are below the market and cheaper than private student loans.

One of the most commonly used federal student loans is the Stafford loan. When you apply for a Stafford loan, you’ll be required to include a Free Application for Federal Student Aid. This is an application that provides the government with detailed information about your finances and the financial situation of your parents. This way, the Department of Education can determine if you are eligible for a subsidized or unsubsidized Stafford loan. If they determine that you have a big financial need, you can qualify for a subsidized Stafford loan. These subsidized loans come with lower interest rates and vary at 3.4% – 4.5% than unsubsidized once vary at 6.8%. While you are in college, you won’t have to pay the interest on your loan because the government will actually subsidize those payments for you.

Another option that you have is the Perkins loan. These loans are only given to individuals who can demonstrate a financial need. They also come with very low interest rates vary at 5.0% and they don’t require you to make interest payments while you’re in school.

PLUS loans parent student loans are another option of federal educational loans that must be applied by the student’s parent and come with low interest rate vary at 7.9%, a little bit higher than Subsidized Stafford Loan and the Perkins Loan, as these both have extremely low interest rates.

Private Loans

If you do not get all of the money that you need for school through federal student loans, you may want to consider getting private school loans. Private loans are issued directly from private lenders instead of from the federal government. These types of loans are approved based on how much money you make and your credit history. The interest rate is also based on your credit history. Presupposition to get this kind of student loan is to have an excellent credit profile, a solid employment history with stable income, some types of collateral and a significant downpayment or a cosigner.

If you want to save money on education loans from private lenders, you need to do your best to make yourself look like an attractive borrower. You can do this by getting your credit history in order before you apply. If you can come up with a strong and creditworthy cosigner or co-borrower for your loans, this may also provide you with cheaper interest rates. For instance, if you can get one of your parents to cosign a loan with you, and your parent has good credit, this can give you a cheaper loan, or need to consider to get private education loan without cosigner requirement.

Making it Work

As a general rule, you should try to get as much money as you need from federal student loans before pursuing other options. They have the lowest interest rates and the easiest approval standards. From there, you can use private student loans to fill in any gaps in funding but need to consider also some loan fees, and other finance charges.

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