Tag Archives: Student Loan

Get to Know Private Student Loan Repayment Options, Restrictions

Student Loan Repayment Options

College is something that every young adult strives for. But who can afford College these days? If you did not save up every dollar since you were born, then you would have to search for a Student Loan. A Student Loan is the future of money lending. Since you would only be using the funds to pay for school, books, etc. you would not need to borrow a significant amount of money.

Senator Elizabeth Warren was the individual who introduced the Bank on Students Emergency Loan Refinancing Act on 06/04/2014. This bill was to allow students to refinance their current student loan and receive today’s interest rate. In other words, you are acquiring today’s interest rate for a long you borrowed years ago. This bill coincides with the federal loan program which has its own federal loan rates. However, despite all efforts to help student loans, the bill failed. Needless to say, that is when private loan companies starting to become strict with their policies regarding student loans.

Having your student loan through a private company has its advantages as well as disadvantages. As a student with a loan, you know that it can be almost impossible to negotiate reasoning if you are not able to afford the payments. Which leaves many individuals wondering why private companies have such strict rules and regulations. Here are a few examples of why private lending companies have to be strict on student loans:

Retail Credit
Student loans with private lenders are categorized as a retail credit. With that said, federal regulators prohibit programs that allow the lending company to alter the terms of the retail credit loan. With these type of loans, you are only offered a six month repayment plan. That doesn’t seem like a long enough time to repay a loan worth a few thousand dollars. You would have to make double the amount of payments to pay the student loan off in the time frame given.

Ironically, a private lender is only allowed to offer any programs if you have defaulted on your student loan. This means your student loan would be 120 days or more past due. This is the only time you would be offered a differed program. However, it is not wise to allow your student loan to become delinquent. Not only does this how on your credit report but it is also available for all loan lending companies to view. Many companies sell their past due loans to a collection agency. These collection agencies buy the student loans from the original lender. Collection agencies know that they will receive more money than what they purchased your loan for.

More Options
The first thing you should do as a borrower would be to look at your financial situation. What can you take out of your finances that would provide you with extra money? If you have extra money, put it as a down payment towards your student loan. I know this sounds funny but it will lower your overall monthly payments. Also, look for a lower interest rate loan that could be consolidated. Since there are so many consolidated loan programs, you could combine all your debt into one monthly payment.

Even if you do default on your student loan, many collection agencies will have leniency towards your good-faith payments. That is why even if you send in a small amount, you are making an effort to exhaust your debt. These agencies will work out payment plans that can fit around your budget, as long as you pay something.

Getting a student loan can be a very helpful option. It is important to understand all rules and regulations that are involved with your student loan. Before you sign your name on the dotted line, ask as many questions as you can think of. This way there will be no surprises in the end. If you still have questions or concerns regarding student loans, feel free to contact us today. Our staff is always available to answer any questions you may have.

Congress passes student loan rate extension

Student Loans

College is something that every young adult strives for. But who can afford College these days? If you did not save up every dollar since you were born, then you would have to search for a Student Loan. A Student Loan is the future of money lending. Since you would only be using the funds to pay for school, books, etc. you would not need to borrow a significant amount of money.

Senator Elizabeth Warren was the individual who introduced the Bank on Students Emergency Loan Refinancing Act on 06/04/2014. This bill was to allow students to refinance their current student loan and receive today’s interest rate. In other words, you are acquiring today’s interest rate for a long you borrowed years ago. This bill coincides with the federal loan program which has its own federal loan rates. However, despite all efforts to help student loans, the bill failed. Needless to say, that is when private loan companies starting to become strict with their policies regarding student loans.

Having your student loan through a private company has its advantages as well as disadvantages. As a student with a loan, you know that it can be almost impossible to negotiate reasoning if you are not able to afford the payments. Which leaves many individuals wondering why private companies have such strict rules and regulations. Here are a few examples of why private lending companies have to be strict on student loans:

Retail Credit
Student loans with private lenders are categorized as a retail credit. With that said, federal regulators prohibit programs that allow the lending company to alter the terms of the retail credit loan. With these type of loans, you are only offered a six month repayment plan. That doesn’t seem like a long enough time to repay a loan worth a few thousand dollars. You would have to make double the amount of payments to pay the student loan off in the time frame given.

Ironically, a private lender is only allowed to offer any programs if you have defaulted on your student loan. This means your student loan would be 120 days or more past due. This is the only time you would be offered a differed program. However, it is not wise to allow your student loan to become delinquent. Not only does this how on your credit report but it is also available for all loan lending companies to view. Many companies sell their past due loans to a collection agency. These collection agencies buy the student loans from the original lender. Collection agencies know that they will receive more money than what they purchased your loan for.

More Options
The first thing you should do as a borrower would be to look at your financial situation. What can you take out of your finances that would provide you with extra money? If you have extra money, put it as a down payment towards your student loan. I know this sounds funny but it will lower your overall monthly payments. Also, look for a lower interest rate loan that could be consolidated. Since there are so many consolidated loan programs, you could combine all your debt into one monthly payment.

Even if you do default on your student loan, many collection agencies will have leniency towards your good-faith payments. That is why even if you send in a small amount, you are making an effort to exhaust your debt. These agencies will work out payment plans that can fit around your budget, as long as you pay something.

Getting a student loan can be a very helpful option. It is important to understand all rules and regulations that are involved with your student loan. Before you sign your name on the dotted line, ask as many questions as you can think of. This way there will be no surprises in the end. If you still have questions or concerns regarding student loans, feel free to contact us today. Our staff is always available to answer any questions you may have.

There is no student loan Crisis

california-student-protests

There is always a lot of talk about how students are so far in debt with loans. Many people talk about certain numbers and references that show that there’s are millions of people who are in debt with financial loans. However, most of the students who in fact graduate from college, are able to repay their loans. It may not be easy as they would like, but it is possible. Now, this is not saying that students are not having any problems. This is just saying that student loan debt is lower than credit card debt and auto loan debt.

With the economy rising, so is debt. But it is everywhere. Not just targeted towards student loans. On average, there are more than one quarter of all students with loans who are currently behind in their payments. That is not much. It does hinder the close future after college. The more money you borrow for your student loans, the longer it will take to repay. When you graduate from College, your dreams are to purchase a home or buy a new car. But when you are repaying your student loans then you will not be able to purchase these items immediately.

In the year 2007, there was a total level of $600 billion of student debt with loans. What people do not realize is that more people are going back to school. Since the economy is constantly changing, more people are enrolling in school to better their education. This would give them a better chance to become employed if they had more education. This has always been an issue with the economy these days. Nothing is guaranteed. But you will have an advantage over the other person who is not educated.

When people talk about a student loan “crisis”, they are extremely exaggerating. This day in age has it harder than the past years. In 2010, there were 22 million graduate and undergraduates students that we enrolled. About two years ago, there were only 19 million students. With more people enrolling, of course there will be more debt. However, with the cost of tuition rising, more people are borrowing more money to pay there funds. Currently today, there are only 10 percent of borrowers that have more than $45,000 in student loans.

We are not saying that there isn’t a lot of debt in this world create by student loans. What we are saying is that the debt many people are claiming is ruining lives is very exaggerated. You are the only person who can run your own life. If you want to go to school, then pay for it. But don’t get upset later when you do not have any money. All because you borrowed $30,000 in private student loans. Be concious of what you are getting. Borrow only the amount that you are needing. If you are offered more, then decline. That is where many people run into issues. Is just because you are offered more money does not mean that you are required to take it. This will also help prevent the amount of debt you will be in. Be smart.