Own Your Loan, Don't Let Your Loan Own You

It is often said that the most effective debt management strategy is to be debt-free. But, in order to pay for your college education, you may need to take out student loans. The hope is your student loans can greatly assist in furthering your education. but there are some instances that getting student loans has lead people to be buried deep in debt.

Now, planning for successful repayment involves a certain amount of planning. The planning should start before you place your pen on your first promissory note. Just as you are making a commitment to your career by way of investing time and money in higher education, you should also make a commitment to your financial future by way of effectively managing your student loans from the beginning.

Here are some recommended tips and tactics that may help you handle your student debt effectively and repay the loans successfully.

Tip #1: Do Your Research: Always note that not all loans are the same. Some of them, such as the ones provided by the Indiana Secondary Market for instance, offer benefits during school as well as after graduation in the form of repayment incentives, while other do not.

Tip #2: Pay Attention to the Mail: Typically, every borrower receives important information regarding the student loan he or she took out.

Tip #3: Be Organized: When taking out student loan from a particular institution, it is always best to save all of your student loan documents and correspondences. This makes you aware of what exactly you've agreed, what is expected from you as a student loan borrower, and how much you have borrowed. Also, when setting up your record-keeping system, make sure you will find easy to maintain over the life of the loan.

Tip #4: Be present at All Required Entrance and Exit Sessions: When you take out student loan, you will be required to complete student loan counselling sessions. This is often considered when you first obtain the loan and upon graduation.

Tip #5: Learn to Manage Money like an Expert: It has been said that if you live like a professional while you are in school, you will live like a student once you've finished your degree. In other words, it is important that you know very well how to handle your money while you are attending school. This will help you lessen the total amount you end up borrowing, and in turn, the amount you will responsible for repaying.

Tip #6: Maintain at least Half-Time Enrolment: Considering a half-time enrolment is highly necessary in order for you to qualify for an in-school deferment. The half-time enrolment normally takes six credit hours. Regarding your school's requirements for half-time status, see your financial aid officer.

Tip #7: Take Advantage of Tax Savings: Some of the student who takes out student loans qualifies for tax credits. To see your own status, check with your tax advisor. The credits are actually based on your qualified tuition payments, and they can help reduce the amount of Federal tax you pay.

Tip #8: Start Repayment on Time: As you enter the repayment period, note that being aware of your student loan obligations is very crucial. This is where the student loan default usually happens. It occurs when you fail to pay back the loan as agreed or meet the other terms of your promissory note.

If you need further information regarding your student loans, always remember that the financial aid staff at your school is probably your most important resource. There are also some publications from federal and state governments, lenders and scholarship granting organizations, and financial ad guidebooks that are available from your local book-store.

































Thursday, March 4, 2010

Sallie Mae Student Loan Consolidation

When your student loans get the best of you and you're wondering how you're ever going to get out from under all that debt, take a look at loan consolidation. It may be the answer to a number of your problems.

Turn to Sallie Mae loan consolidation for a way to pay off your federal student loans, improve your finances, and put a little extra money in your pocket every month. A Sallie Mae loan consolidation replaces your existing multiple student loans with one loan, usually with a dramatically lower interest rate - as low as 4.75%. The difference a few percentage points can make in monthly payment amounts can mean the difference between scraping to pay bills and actually having a little extra pocket money.

It is not uncommon for a borrower to get a fixed interest rate that is up to 0.6% lower than their current rates. According to federal regulations, calculating the interest rate on a consolidated loan disbursed on or after July 1, 1994 involves the weighted average of the interest rates of the old school loans you are consolidating under the new one, rounded up to the nearest one-eight of one percent. Fixed interest rates on a consolidated loan cannot exceed 8.25 percent.

Every July 1, the interest rates on federal student loans are subject to change according to the annual fluctuations of short-term federal securities, and with them your monthly payment. One of the benefits of a Sallie Mae loan consolidation is that the interest rate is locked in for the length of the loan. While interest rates may be lower some years, when you are locked into an interest rate at least your payments will be predicable and will not rise in the years when the interest rates do.

A Sallie Mae loan consolidation also offers the opportunity to increase the length of the loan. The longer you have to pay it off, the smaller the monthly payments will be. Remember though, lengthening the life of your loan may mean paying out a larger total amount over time.

Applying on-line for a Sallie Mae loan consolidation is free, there are no fees, and there are no credit checks. A few minutes of your time can get you smaller monthly payments and better credit scores; when your Sallie Mae loan pays off your old student loans, your credit report reflects those paid off debts.

Things happen in life and in a crisis sometimes, those student loan payments don't get made on time, or at all. If you have used up your deferment and forbearance options on current loans, consolidating your debt under one Sallie Mae loan may mean a fresh start and a clean slate. If you are facing a situation where defaulting on one or more of your current loans is a very real possibility, acting now to take advantage of a Sallie Mae loan consolidation may save you a lot of problems and help you out of an overwhelming situation. If you decide that a Sallie Mae loan consolidation is what you want, there are four options for repayment plans, the Standard Repayment Plan, the Extended Repayment Plan, the Graduated Repayment Plan, and the Income Contingent Repayment Plan. The Standard Repayment Plan offers fixed monthly payments, but the life of the loan is limited to 10 years. The Extended Repayment Plan also offers fixed monthly payments, but spreads them over 12 to 30 years, depending on the total amount borrowed, which lowers the amount of the monthly payments. The Graduated Repayment Plan also spreads payments over 12 to 30 years, but the monthly payments increase every two years.

The Income Contingent sets a payment plan that is calculated on your annual gross income, family size, and total consolidated loan debt, figured into a period of 25 years to pay it off.

A Sallie Mae loan consolidation may be the best option for you, but be sure to explore your options thoroughly to make sure you get the best loan for your situation.

Posted by Student Loans at 9:27 PM
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