Your Debt Consolidation

Debt Consolidation = Fresh Start

2006-06-01T09:09:00.000-07:00

If you are finding it difficult to manage your monthly payments to all of your personal loans, you may want to consider a debt consolidation loan. Depending on the interest rates of your current debt, you may not save very much in terms if interest costs, however you will now have one loan to pay every month making it easier for you to manage your monthly payments.

If you have multiple loans, with payment at different times during the month and at various interest rates, you may want to consider one debt consolidation loan. The savings that you receive will not be as significant as consolidation of credit card debt, however there are still some advantages to consolidating all of your loan payments into one personal loan.

One of the advantages of a debt consolidation loan is that you only make one payment during the month on one loan and it is always at the same time. No more trying to recall what day of the month it is and whether you need to make a payment or not. You can usually set the day of the loan payment and it is always the same day of the month, so it is easy to remember when you have a payment due on your debt consolidation loan. Some consumers will want to make a payment twice a month or every two weeks on their loan. The advantage of this approach is that you pay the loan off more quickly and you pay less interest in total on the loan. The payments are also smaller as well, so they are easier to manage and if you get paid every two weeks, you can line up you loan payment with your pay check.

Consolidating loans into one easy to manage loan may also save you a small amount of money as well. If the interest rates on any of the existing loans are higher than the interest rate of your new loan, your payments may be slightly reduced as well due to the lower interest rate. Your loan manager can help you figure out how much you might be able to save in this area.

Another advantage of debt consolidation is reducing your monthly payments by extending the term of the loan payments. Any time you extend the term of the loan it is going to take longer to pay off your loan and you will generally pay more interest as well over the life of the loan. The advantage of extending the term is that the monthly payments will be lower and easier for you to meet each month if you are finding that it difficult to make all of your payments. However you need to remember that this approach will cost you more in interest over the life of the loan.

In summary, consolidating your loan debt can reduce your total interest payments, help you manage your monthly payments and even decrease your monthly payments if you extend the term of your loan payments longer than the previous loans that you originally held.

Debt Consolidation

2006-06-01T09:05:00.000-07:00

One of the first things you want to do is gather all your information, including your bills, credit card statements, and out standing lender certificates. What you want to do is give the bank a clear picture of what they are being asked to provide funding for. If you go in with a mess you will likely get a messy result.

Debt consolidation can actually be a simple and care free process, as long you go into it with a solid financial plan and strategy. I suggest moving all your current debts to your credit cards just before you apply. You can apply for consolidation online these days, but I would talk to a local finance trustee to make sure your creditors are looked after and paid off. I just like to have a close to home solution. If you do except a debt consolidation loan online make sure you undertand the implications and contract with the internet lender. Make sure you read the small print as far as interest and payment terms are concerned.

So if you follow the above advise you will pay off all your outstanding debts with the lowest interest rate credit card possible and then apply with your local bank. NOTE: Don't do this unless you are pretty sure you will get the loan. Here is how you tell.....

Add up all your debts, add current interest, divide by 36 and see what you get. If you can afford to make that payment each month and still make all your living expenses, bills, rent or mortgage, then you are golden. Also, if you've had steady employment for the last 2 years, you stand a good chance of being approved for funds.

Bad Credit Students Loans

2006-06-01T08:59:00.000-07:00

If your credit is damaged in any way, you may have a difficult time finding a student loan. I've been in that exact same position at one time, and there is hope for you too. What I did was apply for the Federal Stafford loan. Applying is fairly easy and you can get an answer back quickly. The other option I would suggest as far as government student financing assistance, is to research the Federal Perkins student loan.

Federal Perkins loans are advanced via participating schools to undergraduate and graduate/professional students - whereas the Stafford Government loans are for undergraduate or graduate/professional students made through one of two U.S. Department of Education programs. (D.O.E)

1)The William D. Ford Federal Direct Student Loan Program - know as Direct Stafford Loans or Direct Loans

2)The Federal Family Education Loan (FFEL) Program - know as FFEL Stafford Loans (Federal Stafford loans)

There is another option students have if they are burdened with bad credit, and they are called PLUS Loans. Plus Loans are financing parent(s) may acquire for their undergraduate children. Their children must be dependant children, mind you. These PLUS LOANS are acquired through the Direct Loan or the FFEL student loan program.

Students requiring financing with a poor credit history, would likely find their best chances are seeking a federal Government loan. There are some facts you want to know regarding federally sponsered student loans; There are two distribution channels for Federal student loans. The channels are identified by their names: Federal Direct Student Loans and Federal Family Education Loans. Federal Direct Student Loans, also known as Direct Loans, or FDLP loans are funded from public capital originating with the U.S. Treasury.

FDLP loans are distributed through a channel that begins with the U.S. Treasury Department, and from there passes through the U.S. Department of Education, then to the college or university and then to the student. Federal Family Education Loan Program loans, also known as FFEL loans or FFELP loans, are funded with private capital provided by banking institutions (ie: banks, savings and loans, and credit unions). Because the FFELP loans use private capital as their source, students who use FFELP loans are able to take advantage of payment options that are similar to those available to customers who take out a home loan or a consumer loan. For example, some institutions will allow a discount for automatic payments, or a series of on-time payments. In 2005, approximately 2/3 of all federally subsidized student loans are FFELP.

The maximum amount that any student can borrow is adjusted from time-to-time as Federal policies change. A study published in the Winter, 1996 edition of the Journal of Student Financial Aid, titled “How Much Student Loan Debt is Too Much” suggested that debt for the average undergraduate should not exceed 8% of total income after graduation. Some financial aid advisors have referred to the 8% level as “the 8% rule.” Circumstances vary for individuals, so the 8% level is an indicator, but I would suggest if you are still in a bad credit situation, you want to lower that percentile.

For Private Loans it is far simpler. The lender generally disburses the money directly to the school. Any funds borrowed beyond tuition and fees is given to the student for living expenses, room, board, etc.

Regardless of your choice (Federal or Private), you must look into understanding your credit rating. What you want to do is check out your credit score by going to a site like www.myfico.com, and get yourself a credit report.

Once you have a complete credit score for yourself, you should then venture out and try to acquire student financing. For government student loans you should check out the Federal Stafford loan and the Federal Perkins loan.

Now, for a last resort, you can try some of the other bad credit lenders available online and offline. Be careful to make sure you read all the small print and don't get caught up in any ridiculous terms and high interest rates. When you are finally finished your education, be sure to keep your financial nose clean. All the very best to you in your future endeavors and your educational quests.