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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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An Introduction to Teacher Loan Forgiveness Program and How to Apply

What is the Teacher Loan Forgiveness Program?

Nowadays, a large number of students in The USA take student loans to pay for their academic education. Student loan repayment usually comes in six months after student finishes school.  However, professionals in some particular occupations can expect to have their student loans forgiven, and teaching profession is one of these. Teacher loan forgiveness program (TLFP) is a supportive loan cancellation program introduced by the US Congress. Given that teaching is considered as a very responsible and demanding profession, the intention of this program is to reward those working as school teachers for their important commitment and to encourage them to stay in teaching profession. Teachers with student loan debts now can save significant amount of money with launching this program. To qualify for a US federal loan forgiveness program, applicants have to work on full-time bases as teachers for five consecutive academic years in schools where teacher earnings may not be high. These schools are called “low-income” schools as they have a lot of students from low-income families. A list of selected schools can be found in the Department of Education’s online Teacher Cancellation Low Income Directory. The Department of education publishes this list of designated school boards every year.

The details of teacher loan forgiveness program vary by state and federal government regulations. For example, some states like Georgia have their own programs for teacher loan debts forgiveness which gives the opportunity to more categories of teachers to get their student loan cancellation. In Georgia foreign language teachers can also benefit from this program, since they are eligible for TLFP in this state.

The teacher loan cancellation program only is valid to the exceptional balance at the time the application was accepted. Preceding payments are not to be refunded. The particular loan provider makes a decision on student loan forgiveness plan, and it is not possible to be automatically approved for debt forgiveness. The maximum forgiveness amount is up to $5,000 (increases to $17,500 for teachers who teach special education or math and science in secondary schools).

Teachers Loan Forgiveness Programs

Stafford Loans Program

Stafford Loans Program is a federal program intended to support people entering teaching profession. Consolidated Stafford Loans are made throughout the Direct Loan or Federal Family Education Loan programs. To qualify, teacher must be a new borrower of the Federal family Educational Program or Direct Loan Borrower on or after 1st of October 1998. In addition, teacher must not have received refund from the AmeriCorp Program under Subtitle D of Title 1 of the National community Service Act of 1990 for the loan she is seeking cancellation for.  Furthermore, he or she must not be in failure to pay on the loan.

How to qualify?

To be eligible for the Stafford Loan Forgiveness Program applicant must:

  • Have worked as a teacher for at least five successive academic years in an elementary or secondary public or nonprofit school that was nominated a “low-income” school by the US Department of Education
  • Must be employed on full-time basis
  • Must have his teaching service began on or after October 30, 2004
  • Have no less than one of the teaching years after the 1997/98 academic year
  • Student loan must be made before the end of the fifth year of qualified teaching
  • Those teaching in elementary schools, must provide evidence they have knowledge of teaching skills in elementary curriculum areas
  • Teachers working in secondary schools must certify that they are teaching a subject applicable to their university major
  • Highly-qualified teachers of secondary school key subject areas: math and science or teachers of special education who work with disabled children may qualify for the forgiveness maximum to $17,500

Perkins Loan Cancellation Program

The Perkins Loan cancellation plan has less strict requirements concerning loans that can be canceled than Stafford Loans program, although normally comprise Perkins Loans made on July 1, 1972, or after. Perkins Loan forgiveness program allows teachers to receive forgiveness benefits increasingly. Fifteen percent of teacher’s Perkins Loan credit gets canceled after first two years of teaching service; twenty percent gets canceled after third and fourth year and thirty percent after the fifth and any following years.

How to qualify?

To meet the criteria for the Perkins Loan Cancellation Program applicant must:

  • Have worked as a teacher for at least five following academic years in an elementary or secondary public or nonprofit school that was designated a “low-income” school by the US
  • Department of Education, where at least 30% of students come from the “low-income” families
  • Have taught  in the specific subject area or has been a special education teacher; in that case there is an exemption of the “low-income” rule
  • Have worked in a private, but strictly non-profit school, servicing “low-income” students
  • Must be considered as a full-time professional by the employing school
  • Have taught in the field of science, math, bilingual education and foreign languages or in a subject designated as a teacher deficiency area by the state education agency.

How to apply

  • You can apply for Teacher loans forgiveness program after you have taught for five consecutive years in “low-income” school
  • You can submit the application by filing out online Teacher Loan Forgiveness Application Form (2012). Applications and regulations are available on the Department of Education website under Student Financial Aid.
  • You must get your teaching certification from the school’s administrator (usually principal or vice principal) in order to qualify for teacher loan cancellation
  • After your loan forgiveness application is completed, send it to your loan servicer (if you have a direct loan) or to the Department of Education (if you have a federal loan) for the further processing.
  • If your service provider finds that you are eligible for TLFP, you will be mailed a confirmation for the forgiveness balance.

Applying procedure in five steps

  1. Visit the studentaid.ed.gov and choose “Repayment Information”, than select “Cancellation and Deferment Options for Teachers”. In case you have received application from your lender, go to step 3.
  2. Determine if you meet the eligibility criteria
  3. Print a copy of Teacher Loan Forgiveness Application and complete the necessary information in sections 1 and 2. Sign your name in the field where it asks for the borrower’s signature
  4. Have your Chief Administrative Officer fill out the information in section 3
  5. Mail the application to the address given in section 9. In case the address is missing, contact your loan provider.

Benefits and drawbacks of Teacher Loans Forgiveness Program

The main advantage of teacher loan cancellation is that it saves low-income school working teachers a considerable amount of money, especially for teachers who borrowed a minimum amount of student loan. This is beneficial for “low-income” schools also giving the fact that they usually have difficulty hiring highly qualified teachers. On the other side, one of the main disadvantages of this program is time. Namely, teachers are obligated to complete five uninterrupted year teaching period to qualify, which means that they must extend their endurance in order to meet the criteria. In addition, most of these designated schools are often located in deprived and dangerous parts of the city.

To sum up

Teacher Loans Forgiveness Program is US government project intended to reward teachers who have preferred to work in high-demanding teaching areas. The major purpose of this program is to reward those working as school teachers for their commitment to profession.

To qualify for either Stafford or Perkins Loan cancellation programs, the main requirement for applicants is to have five comprehensive academic qualified teaching years. Stafford Loan cancellation program requires teachers to complete consecutive five years of teaching, while with Perkins Loan forgiveness teachers receive forgiveness benefits increasingly. The limit of possible forgiveness is $5,000, but teaching science and math at secondary school or teaching special education which includes work with children with disabilities increases applicant’s prearranged forgiveness maximum to $17,500.

Only full time teacher can qualify for either, Stafford or Perkins Loan cancellation programs. To qualify for teacher loans forgiveness program, teachers must get certification of their teaching from the school administrator.

Many US states, such as Georgia have their own teacher loans cancellation programs. Such programs regularly work adding together to federal loan forgiveness programs. Moreover, they create opportunity to more teachers to get their student loan cancelled.

Apply for your teacher loan forgiveness today

There are many “low-income” school boards across The USA today who are in need for qualified teachers to provide quality education to their students. If you meet the criteria and you have passion for teaching in one of these schools, apply for the teacher loan forgiveness program and have your student loans forgiven. Once your loan forgiveness is accepted, your student loans are fundamentally erased, together with any interest sustained.

We strongly recommend potential applicants to check their state’s Education Department to get information if the state provides such loan forgiveness program.

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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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Introduction to Federal Student Loans for Education

After high school, many students are unsure of what to do with their lives. They have the option of going to work or enrolling in college. Many who want to enroll in college do not have the money that it takes to pay for tuition. In this situation, students can borrow much of the money they need from federal student loans. If you are about to graduate from high school or you are thinking about going back to college, understanding how student loans work can be extremely helpful.

Direct Loan Program

The federal government offers a Direct Loan Program through the Department of Education. With this program, the federal government loans money directly to students, with the help of loan servicers. This means that when you borrow money from the Direct Loan Program, you’ll be able to get any help you need from an individual loan servicer instead of having to deal with the Department of Education.

Types of Student Loans

When you want to get involved with federal student loans, there are a few different types of loans that you could pursue. Two of the most common types of loans are Stafford and Perkins loans. Stafford loans are typically available to anyone who wants to go to school, regardless of credit history or income. With Stafford loans, you can get a subsidized loan or an unsubsidized loan. Whether you qualify for a subsidized loan will depend on the information contained in your Free Application for Federal Student Aid or FAFSA. If they determine that you have a significant financial need, then you can qualify for a subsidized loan. This means that your interest will be paid while you are in school, and your loan interest rate will be lower overall.

The Perkins loan is a similar type of loan, except it is only for individuals who have a significant financial need. There is a maximum amount of money that you can borrow each year with the Perkins loan program. If you still need to borrow money after the Perkins loan, you can use a Stafford loan.

PLUS loans are another type of federal education loan that you can get from the government. These loans are designed for parents of college students or for graduate students. Eligibility for this type of loan is also determined with the information from the FAFSA.

You also have the option of getting a consolidation loan from the government. With this type of loan, you can consolidate multiple student loans into a single package. The only have the option of consolidating once, so you need to make sure that you do it at the right time to get the best interest rate.

You may also be able to qualify for state-based student loans. These loans are actually issued from state governments and agencies instead of the federal government. Minnesota, Texas, Hawaii, New Jersey and Alaska are the five states that offer this type of program.

Considerations

Getting education loans from the federal or state government can provide you with cheaper interest rates than what you can get in the private market. They are also easier to get qualified for because you do not have to have a certain amount of income or credit score. The repayment terms of these school loans can also be very flexible. You have the option of choosing from a fixed payment, a graduated payment or an income-based repayment option. If you are interested in going to college, looking into federal loans should be one of the first things you do. After scholarships, grants and other sources of funding have been exhausted, they are often the most attractive option.

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Medical School Loans To Finance Your Medical Education

With the baby boomer generation getting older, the need for medical services is at an all-time high and still growing. Because of this need, doctors and other medical professionals are in high demand. If you are looking for a good career for the future, getting involved in the medical field is definitely a safe bet. However, the process of getting there can be time-consuming and expensive. In order to help you pay for college, you may need to take out medical school loans.

Types of Medical Student Loans

When it comes to getting medical school loans, there are two different types of loans that you could use. The first type of loan is a federal student loan. Federal student loans will help you go through regular undergraduate college and help you pay for your doctorate degree courses. These loans are need-based and are not necessarily dependent on your credit or your income.

If you do not have much money and your parents do not have many assets either, you may be able to qualify for subsidized federal student loans. With these federal student loans, you don’t have to pay the interest while you are in school. In fact, the federal government actually pays the interest for you while you are still in school. This helps you keep your debt at a more manageable level while you are still taking classes.

Another type of medical school loan that you may be able to qualify for is a private loan. Private student loans are issued by lenders such as Sallie Mae and Citi Finance. These loans do depend on your credit and your income level. These loans are not backed by the federal government and they come with higher interest rates and payments. In many cases, you have to at least make the interest payments while you are in school. You can apply for medical educational private student loan with no cosigner or co-borrower but need to have sufficient strong credit profile and no bad credit.

Student Loan Debt

One of the problems with student loans is that they lead to a large amount of debt for students. This is especially true for individuals who choose to pursue a career in the medical field. In many cases, if you try to become a doctor, you might spend up to 12 years in school after high school. This means that you’re going to rack up some pretty big debt along the way.

Because of this growing problem, many people are looking for ways to get help. There are debates going on in the federal government about whether they should forgive some of the principal of these loans so that MD students can have a better financial situation.

One of the advantages of being in the medical profession is that you can get some of your student loans forgiven. If you work in a rural area that is understaffed with medical professionals, you may be able to get a large portion of your debts forgiven by the lender.

Consolidation

Another issue that many people in the medical profession have is that they have multiple student loans. This can be difficult to keep up with because you have multiple payment due dates and interest rates. In this situation, one option that you have is student loan consolidation. When you consolidate your loans, you can only do this once. At that point, you have to pay off the loan. You can typically choose one of many different payment plans. Some are based on making even payments over the life of the loan. Others are based on your income while some use a graduated repayment plan. School loans lenders are generally flexible when it comes to repay your debt, but you won’t be able to get out of repaying it.

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Consolidate Private Student Loans – What You Should Know

Refinance private college loans

While some students are fortunate enough to have parents pay for their educations or receive full-tuition scholarships, student loans are a reality for most college students today. Between the rising cost of tuition, room, board, endless fees, books and transportation expenses, most students must take out some student loans in order to afford a college education. While it is easy to sign on the line and receive thousands of dollars, it is much harder to leave school and be able to immediately pay off these loans.

Most student loan payment become due six months after the student has graduated or sooner if the student drops out of school early. Many graduate students do not have a professional salary at this point in time and even if they do, may still struggle to make student loan payments. Consolidating students loans can help borrowers receive reduced payments and more flexibility with loan payments.

Some student loans are backed by the federal government, including Stafford Loans, Perkins Loans and PLUS Loans. These loans can be consolidated into Direct Loans that provide the greatest amount of flexibility. Consolidating federal loans allow borrowers to receive a reduced interest rate and the convenience of one monthly payment. Among the various types of repayment terms for federal loans are income contingent repayment plans and an income-based repayment plan. Extended plans allow the borrower to pay smaller payments over an extended period of the loan. Borrowers can change to different repayment plans as their needs change.

Private consolidation loans are also available. To consolidate private student loans is a great way to simplify your finances and lower your monthly payments for more friendly payment terms. These types of loans are based on the borrower’s credit score and current financial position. Getting all of a borrower’s loans rolled into one larger loan can provide multiple benefits to borrowers. This strategy decreases the number of bills that arrive each month and the likelihood of missing payments or making late payments. Consolidating the loan often entails a resetting of the loan’s term which can decrease the amount of the monthly payment. Borrowers can also save a substantial amount of money by receiving a reduction of an interest rate by one or more percentage points.

When a borrower is looking for consolidation options, it is important for him to thoroughly research the options that are available to him. Various options will be available based on the types of loans that the borrower has. When applying for a private consolidation, it is important for the borrower to improve his credit score as much as possible prior to applying for the loan. If the borrower can increase his credit score by 50 or more points, he will likely be able to receive a consolidation loan with preferable terms. Borrowers can also apply for a home equity loan in order to consolidate their loans. Home equity loans tend to have lower interest rates and fixed interest rates. Many private student loans have a variable rate. Even if the two interest rates are comparable, it is in the borrower’s best interest to apply for a fixed rate interest rate so that the borrower can lock in the lower rate for a longer period of time. Another option for borrowers is to contact the financial institution that currently holds their loans and request that the lender provide them with a consolidation loan with a lower interest rate before they reach out to a new lender.

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Bankruptcy and Student Loans Available Options

Available options to handle your student loan debt

Bankruptcy is a serious step that many people contemplate after their financial obligations become overwhelming. They hope that they can get a fresh start and be rid of the hefty student loans that they have accumulated or that they took out for their children’s educations. However, school loans are not typically discharged by bankruptcy. There are a few exceptions and alternatives to help you deal with your obligations in a wise and responsible manner. Bankruptcy and student loans are ineligible for discharge.

If you become bankrupt, you can have your loans discharged if you can prove that paying the debt obligation will be an undue hardship on you. Typically you must prove that you are permanently and totally disabled. A physician must sign a form that states that your disability will likely cause death, has been ongoing for at least 60 months or will lead to a disability that lasts for at least 60 months. Loans that qualify for discharge under these guidelines include FFEL, Perkins Loans, Direct Loans or TEACH grants. Veterans can also use this type of discharge, but they complete a different set of paperwork and follow different guidelines. If approved for discharge, you will then undergo a three-year monitoring period. During this period, you may not annual income that is above the poverty guidelines for a two-person family as determined for the state where you reside and you may not receive new loans.

Other options are available to handle your student loan debt. You may be able to use a different repayment plan that is more manageable for your budget. You may be able to defer payments or forbear them for a specific period of time. You may also be able to pay reduced payments over an extended period of time. Some loans allow you to make interest-only payments that are based on your income. You may also be able to alter your payment amount in accord with your income and the size of your family.

You may be able to claim that your education loans are an undue hardship during a bankruptcy proceeding. You will have to explain in front of a judge how the loans are an undue hardship. You must prove how your financial situation is not likely to improve in the future, that you tried your hardest to pay down the loans and that you will not be able to afford life’s basic necessities if you must repay the loans that you accumulated. Even if you can prove all of these elements, a judge is likely to deny your request if you are not a disabled individual. If you have disposable income and a steady stream of income, you may be able to file under Chapter 13. Chapter 13 does not discharge your debt, but it may provide you with an opportunity to lower your payments that you make for your loans each month.

A final option is to place your loans on an unsecured credit card with a low balance. This will allow you to pay down your loans at a slower rate to ease the financial pressure.

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Applying for Student Loans Consolidation What You Should Know

Student loans consolidation is type of loan which allows borrower to replace several student loans like Perkins Loans, PLUS Loans or Stafford Loans or some private loans with just one. Under this plan, students can borrow enough money in one loan to repay other student loans. In case of federal student loans, the Federal Direct Student Loan Program lets you to consolidate most federal loans. For the private student loans, you can apply for a loan and use it to repay several private loans, so as to consolidate the sum and combine multiple repayments into one.

Benefits and Drawbacks of Student Loan Consolidation

There are some advantages of getting student consolidation loan, such as follows:

  • Student Debt Consolidation loan may have a lower interest rate than the rates on credit cards, so the loan should reduce student’s interest charges and help him/her eliminate credit card debt, finally.
  • You may have the opportunity to repay your student loans over extended period of time, which is advantageous because decreases your monthly payments.
  • If you take a private student loan, compared to federal loans, it is possible to negotiate more favorable interest rates with bank or other lender.
  • By joining your federal student loans with a for example, bank or other lender, you owe money to the bank instead to the government, which can be beneficial since if you fail to repay your federal loan, government can take hold on tax refunds; the bank cannot do this.
  • In case you have a negative credit rating report due to your previous student loans, a consolidation loan can let you repair your bad credit history.

On the other hand, there are some downsides of getting student loans consolidation as well.

  • Loan repayment extension, often from ten to thirty years means that at the end you will pay back the much higher total amount of the loan than the particular loans were themselves.
  • You may be eligible for interest release on condition that your student loan is guaranteed by the U.S. government. After student loans consolidation the bank will not give you interest relief.
  • In case you have bad credit or job history the interest rate charged on your student loan by the bank may be higher than interest charged under the federal student loans.
  • Consolidation loans are not available to all students; you must meet certain eligibility criteria to qualify for the student loans consolidation.

Eligibility Requirements

To qualify for the private Student Loans Consolidation Plan, you must meet some conditions:

  • You must be working or have some other source of monthly income allowing you to pay off the loan. Bank will estimate your ability to manage your debt based on your income.
  • The bank will also require the copy of your monthly budget statement to decide if you can handle your loan repayments.
  • To satisfy requisites set up by the bank or other lending institution you are dealing with, you may need a co-signor or collateral (such as a house or a car).

How to Apply for the Student Consolidation Loan and Repayment Options

The application process is very simple. You just need to fill the online application (also available in paper form) and Promissory Note and submit it to apply for a Direct Student Consolidation Loan. The application also includes your Borrower’s Rights and Responsibilities. In addition, you will have to complete Repayment Plan form in order to select your repayment plan. You can choose from several repayment option and some of them are: Income-Based Repayment which depends on your income, which means that the repayment amount is going to rise as your income does; Income-contingent and Income-sensitive plans for individuals with fluctuated income.

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.

Before You Apply

There are some important issues to take into account when you are thinking of taking the student loans consolidation plan. Firstly, always do a little research on the loan characteristics, available repayment options, interest rates and other term and conditions. Do not sign any contract before you are sure that you completely understand all the matter you are getting involved with. Read as much articles about student loans and available borrowing options to figure it out which one is the most appropriate for you. To determine if you are eligible for a Student Loan Consolidation plan, contact department of Education, your bank or lending company to obtain all the necessary information.

In the long run, a consolidation loan typically pays more interest over time due to the extended loan term, so be aware of this before you apply for your student loans consolidation.

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Getting Private Student Loans to Finance Education

An Introduction to Private student loans

Private student Loans are great loan option to be considered when you cannot obtain other forms of financial aid. Private student loans are financial resource designed to help you pay all expenses of your education and very helpful way to complement your federal student loan. Private student loans are credit-based financial support which you can use to pay any academic costs like tuition, books, room, school fees, transportation and other expenses. Moreover, private loans help you pay additional costs that are not covered by federal financial aid. What makes it different from other student financial aid that the private loan can cover up to the total cost of your education and that in most cases you need to have a cosigner on your application (in that case your interest rate will be calculated based on your credit and your cosigner’s credit). Also, private student loans require a credit check for the primary borrower.

Private Student Loan Benefits

The major advantage of Private Student Loan Plan is flexibility. Private loans give you the elasticity to apply whenever you need financial help during your time at school. Other important benefit is that any creditworthy borrower is eligible to apply for the loan get loan, in contrast to federal loans that are mainly based on financial need (excluding PLUS loan) and student’s status. In addition, this type of loan gives you opportunity to pay for extra costs like transportation, computer, books and other charges. Diverse private loan lenders offer different terms and conditions. We recommend that you discuss these terms and conditions with your lender before signing a contract. Also, ask for benefits and discounts that private lenders offer, since different companies offer different benefits and discounts.

Eligibility Credit Requirements

In order to qualify for private student loan you must be enrolled at least half-time at an eligible school. In addition, you have to be the U.S. citizen or Permanent Resident and your cosigner and you need to have social security number and pass accredit check.

Length of the Process

Usually you should allow 6 to 8 weeks after the application for your school to receive your loan funds.

Private Student Loan Interest Rate

Interest rates under private student loans are calculated based on a published index such as London Interbank Offering Rate (LIBOR) plus extend based on your credit history and score. In case that cosigner is required, your interest rate will be calculated based on your credit and your cosigner’s credit. Since the interest rate is variable, it will oscillate over time.

The best private student loans have interest rates of LIBOR + 2.0% or PRIME – 0.50% with no fees. Unfortunately, these rates often are available to applicants with great credit history and a creditworthy cosigner. If you want to get approved with no cosigner on the loan, you need to prove that you have enough and secure income coming in on a regular basis.

Repayment plans

We strongly recommend that you carefully consider all available loan repayment options when applying for a private student loan.

There are numerous beneficial loan repayment plans offered by different lenders. You should keep informed about these budget friendly repayment options to make your private student loan repayments easier. These repayment plans include full loan deferral, interest only repayment, immediate interest and principle repayment.

Full Deferral

Payment of principal interest starts six months after student lefts school, there is no interest payments during enrollment in school. Interest will continue to accumulate during the deferment period and will be added to the loan at the time of private student loan repayment.

Interest Only

While you are enrolled in school up to four successive years you are going to pay only accrued interest. Principal interest repayments will begin 45 days after graduation.

Immediate Repayment

Payment of principal and interest will begin instantly after the loan is completely paid out.

As a general rule, you should apply for a private student loan only if you have failed to obtain federal student loans or other types of financial aid for students like college scholarships, grants or work-study aid. If you are looking for more flexible financial aid to cover your education expenses you can apply for an uncertified student loan, you can borrow more money because the loan limit is much higher than certified education loans and without any authorization from your college.

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