The Federal student loan program has benefited thousands of college students in the forty years since it was introduced. Interest rates for the program have historically been quite competitive, and the program has allowed many people to acquire a college education who otherwise might not have been able to afford one.
At the moment, interest rates on Federal student loans are the lowest in history, but that is about to change. On July 1, 2005, the interest rates on Federal student loans will rise, due to an increase in the price of Treasury, bills, to which the interest rates on student loans are tied.
While an increase in interest rates is seldom viewed as a good thing, knowing about it ahead of can be helpful. Between now and June 30, new graduates or those who have been repaying existing loans can consolidate their student loans at current rates. The rates currently vary, with fixed rates being slightly higher than adjustable rates. Those considering consolidation might wish to convert their loan to a fixed rate. Depending on the amount of the loan, borrowers may extend their loan terms to as long as 30 years.
There is also legislation pending in Congress that would change the Federal loan system so that all future loans are adjustable rate, with no fixed rate option. This will save the government money by not allowing students to lock in long-term loans at low rates during times of increasing interest rates. Students who wish to obtain a fixed rate loan may not have much longer to do so.
Rates will vary slightly from lender to lender, and the market for loan consolidation is quite competitive. Those wishing to consolidate their loans should consider shopping around for the best deal while time permits.
By: Charles Essmeier
Posts Tagged ‘Loan Terms’
Debt Consolidation – Consolidate Your Student Loans Now!
February 4th, 2010Consolidating Your Student Loan
January 25th, 2010
When getting out of college many students are faced with the fact that student loan repayment beings shortly there after. Consolidating your student loans down to one payment can greatly reduce the amount of money you will pay on interest alone by a sizeable amount in the long run.
Student loans tend to have a repayment period anywhere form 10 to 20 years. This makes it possible for the parents and students to repay the loan without feeling bogged down. However repaying the loans over a longer period can result in higher interest rates which results in more money out of your pocket.
When applying for a student consolidation loan, you are trying to lower the balances of all your loans into one lump sum payment. Balances from other loans can easily be transferred from one lender to another. Some place to look into in regards to consolidating students loans are Perkins, Stafford, FISL and HEAL. It is possible that some lenders will consolidate the student loan as a private loan as well.
Paying off a student loan in less than 10 years may reduce the monthly payment without extending the overall loan terms beyond 10 years. However, missing just one payment could increase your interest rate on the loan raising your overall monthly payment. It’s important to remember that if a student consolidates their loan before they begin making monthly payments, the interest rate could be much lower.
In some cases students have trouble paying off their student loans having just gotten out of college and in search for a nice paying job. There are specific plans that will allow a student to adjust their monthly payments on a sliding scale that start out with a low monthly payment and increase slightly every few years. This student loan consolidation method is quite popular by many since it allows for the low monthly payments initially, giving the students plenty of time to increase their salary over the upcoming years.
By: Timothy Rohrer
Student Loan Without a Cosigner
January 9th, 2010
Student loans without cosigner are possible to get. Now, students looking for no cosigner loans will probably take out federal loans at first. Federal loans, of which the Stafford and Perkins loans, comprise. It’s possible for students to pay for college just with these two types of loans. Now, if you intend to pay for college with federal loans, you need to be prepared for the possibility that federal loans won’t cover the full cost of your education. What do you do in this case?
The solution is to take out private loans. Some of the more popular private student loans are chase loans and signature student loans. The requirements for private loans are that you either have good credit or you have a cosigner. Now you may ask why take out a private student loan when you can actually get a federal student loan which is no cosigner and has no credit check.
The reason is that private loans may offer better interest rates and loan terms if you have good credit or you have a cosigner with good credit. Thus it may be a better deal for you to look at getting a private loan. The other option, and this is a common option, is if you don’t have enough federal loan funding to pay for college. If this is the case, then you will need to get loans without cosigner that are private. Now your option if you are looking for private student loans without cosigner is to get a bad credit loan – these have high interest though, so be wary.
By: Jon Snow