Posted by The very best way to manage debt is to be debt-free, yet that is easier said than done in today’s economy. However, when it comes to paying for your college education, acquiring debt or student loans to afford the tuition cannot be avoided for many students.
In planning for the successful repayment of your student loan many things must be taken into consideration. To get ahead of the game you should plan to repay the loan before you sign the first promissory note. In a perfect world this might be the case, quite the contrary most student do not consider repayment until after they have graduated from college and land their first job.
Here are some suggested tips to help you make plans to deal with your student loan effectively to ensure repayment success.
Tip #1: You Do the Leg Work
All loans are not equally created. Some loans offer repayment incentives while you are still attending college; this bonus in some cases can be extended even after you have graduated. On the other hand, there are loans that provide no such stipend and the loans are due shortly after you have graduated college. For example, the Federal Family Education Loan Program (FFELP) loan charges a 3% loan origination fee; one stimulus is the proposal to pay this fee for students. The student in-turn has more money to off-set the cost for books, school supplies and living expenses.
An example of the incentive after graduation would be the fact that you could qualify for reduced interest rates. Also, should a student want to repay the loan through an automatic withdrawal system, like payroll deduction, for example, the probability of receiving this incentive is even greater? As you can see, there are notable differences in each student loan; that is why it is necessary to ensure that you have a thorough understanding of what each loan offer; and choose the one that provides the best incentives.
Tip #2: Read Your Mail
Typically, student borrowers get tons of information concerning the student loan. The student receives mail, normally, immediately prior to, throughout and following graduation from college. Consequently, it is crucial that you read through the entire stack of mail carefully. Therefore, if you have concerns, or there is information you do not understand; by knowing what is going on now you can get the problem resolved right away. Remember, it is necessary to ask if things are not clear, don’t ignore the mail or you might miss out on a critical deadline or important information you need to act on concerning the loans.
Tip #3: Organize that Mountain of Paperwork
Save all of your student loan paperwork and correspondences, as soon as you get it in the mail in the mail. That way, you are going to know exactly what you agreed to, what is expected from you at loan repayment, and also to remind you how much you have borrowed, which is extremely important. It is interesting how signing the promissory note for your loan is so exciting, repaying the loan seems far away, but only for a while. Four years of college pass by quicker than you think. Before you know it, you are graduating, and the student loan repayment is glaring you in the face.
Organization and having the ability to put your fingertips on the loan paperwork will assist in alleviating a lot of the panic. To make things easy for you, begin by establishing a good, easy to use, record-keeping system in which you are able to keep your student loan paperwork and correspondence. The bookstores and libraries have books and software products on personal finance and organization that will help you get going. No matter what filing system you choose, whether document folders, binders, portfolios, or envelopes, create one file for each loan or account you have, and keep your items categorized appropriately. Additionally, while organizing your record-keeping system, make sure that it is safe. The record-keeping system should be kept free from thieves or fire. A number of professionals also recommend that you need to keep your student loan documents and correspondences until they are all totally paid off. This is what you need to keep a record of.
*Essential paperwork like your college student loan applications, promissory notes, disbursement and disclosure statements, and also loan transfer notices. * Copies of all correspondences concerning your student loan company and/or servicing company, such as your school’s financial aid office. * Contact and phone number of the loan provider.
Tip #4: Be Present at all Required Entrance and Exit Sessions
When you take out a student loan, you will have to complete the student loan counseling sessions. Some schools give this on-line and the sessions will not require a considerable amount of your time. They will give you a significant amount of information concerning your rights as well as your obligations as a student borrower.
Tip #5: Budget Finances Like a Pro
The adage when you live to impress when you are in school, you might live like a pauper when you have completed your degree. Quite simply, it is essential that you learn the best way to manage your hard earned money when you are going to school. Frugality can help you reduce the amount of the loan you apply for; as well as reduce the total amount you are going to be responsible for paying back. Here are a few sensible techniques worth taking into consideration:
* Prepare realistic budgets while you are going to school and even after you graduate. This will probably enable you to borrow only what you need, providing you an excellent opportunity to pay back the loans. * Learn how to live as inexpensively as possible. Bear in mind you are only a college student. You can enjoy a much more trouble-free life if you graduate with little to no financial debt. Many excellent tips on how to be cash conscious include finding a roommate, renting a video rather than going to the theater, and taking your lunch from home rather than going out to restaurants.
Thriftiness is the name of the game, so be as thrifty as you possibly can. * For virtually any credit card debts you receive, try to pay off the total amount due. * Set up a financial budget for yourself and stick to it. As long as you are in college, it will be beneficial to see how you can avoid the desire of using credit cards or your student loan money to purchase items that are not contained in your spending budget. Never simply purchase unneeded items. * If at all possible, check out work-study or other part-time job. Finding a part-time job will give you the chance to gain useful specialized experience, as well as providing additional income to cover expenses.
Tip #6: Retain at least Half-Time Enrollment
If you are thinking about half-time enrollment, it is essential to ensure that you are eligible for an in-school deferment. The part-time enrollment usually takes six credit hours. Check with you educational institution requirements concerning the prerequisites for half-time standing.
Tip #7: Make the most of Tax Cost savings
A number of college students who take out student education loans qualify for tax breaks. To determine your status, seek advice from your tax consultant. The breaks are now determined by your qualified college tuition repayments, and in addition, they will help decrease how much Federal tax you have to pay. If you are paying interest on a student loan, it is possible to receive a deduction on your individual Federal tax return for all interest payments. When, you get the advantage of the tax credit as well as the deductions, use the extra tax reimbursement to pay down your student loan, or to take care of the educational expenses.
Tip # 8: Show Me the Money
College graduations is now behind you and your new careers looms just ahead, but guess what; it is now time to repay those student loans. Some loans come due soon after college graduation while other loans allow a bit of time before repayment is due. The bottom line is the loan will have to be paid. Here are some recommendations when you enter the repayment period:
* Submit the loan payment as soon as it is due each month for the full payment amount or even more. This should be done no matter whether you receive a monthly bill or not. *Understand the pay off alternatives offered by your student loan lenders. One option allow you to decrease the loan by making larger monthly payments, and other option allow you reduce your initial monthly bills by making it easier to repay the loan early in your career.
*Contact your lender and inform them immediately of any change in your name or address; if you have questions about your college bill; making payments on time is a problem; loan deferment or forbearance might be needed to help you through a financial crisis. *Make sure you clearly comprehend all mail you receive from your student loan lender and respond immediately when notified. For Further Information concerning your student loans, always remember that the financial-aid office at your school should be your first point of contact. Additionally, there are a number of publications from the Federal and state governments, lenders and college admissions office, libraries and your local bookstore.
Here’s to your success!
For me to admit that I am still paying off student loans this late in my life is a source of embarrassment. I refuse to reveal my age but believe me I am too old to still be paying off student loans. Oh, as I recall, President Obama and first lady Mitchell Obama paid off their student loans only a few years ago, so maybe I should not feel too bad. With that said, student loans are, and will continue to be an albatross around the necks of thousands of students and the numbers are growing each and every year. What can be done to waylay this dilemma? Unless you are born into a wealthy family, have parents who set up an annuity to cover the cost of your college education, brilliant enough to win a full scholarship, then student loans will be the way most students will have to go to complete his/her college education.
The loan will be even larger if the students choose to pursue a graduate degree or higher, thus adding to the cost that will have to be repaid. However, because you have to take out student loans to support your education, there is no reason why the loans should not be managed properly! So, student loans yes, inappropriate managing the loans is a definite no, no. Be sure to be frugal and find out the very best way to manage your student loans while still in college. There are ways to ward against the inevitable debt, make the best use of it.
Car buyers know the benefit of a loan. A loan can help you get a vehicle you want at a monthly payment that fits their budget. What you may not know is that in the case of an auto loan, you can avoid travel and apply for the car loan from your computer! The availability of online auto loans comes from the emergence of online financial institutions. Banks and several other businesses have become comfortable operating online, with some banks even performing loan interviews over the internet. In the case of online auto loans, banks and other financial aids can operate via online lenders to help people receive their loans through online transactions.
One of the benefits of applying for a car loan online is that the car loan application takes no time at all to finish. Whereas you would have to commute to the bank and then the dealership to fill out the paperwork involved with applying for a loan, you will not have to leave the house to fill out an online auto loan application! The streamlined service involved in applying for an online auto loan comes from the plethora of online loan lenders that will work with you quickly and efficiently to find the best loan that you need.
A simple search will reveal thousands of sites and lending services ready to help you on the spot and the applications are stress free. As with all loans, whether they are for a car or house, when applying for a loan online, research it! The online loan rates can differ wildly depending on what bank, company, or business the online lender works with. In order to find the best APR on a loan, I would recommend searching various lender web pages, such as Up2drive.com or Myautoloan.com. These sites have APR estimates on the main web page and can give you a rough idea of what you are looking at paying for your monthly bill.
As with all loans, the APR is extremely important to take into account when looking at repaying your loan. The APR, or annual percentage rate, is the interest returned on your borrowed loan from the bank or financial service. These institutions can help settle your financial matters through a fixed APR, meaning an interest rate that cannot change, regardless of the bank’s situation. A non-fixed APR means that the interest rate on the loan from the bank or in some cases, the dealership itself, would fluctuate at the end of a year. At the beginning of the New Year, the bank can either decrease or increase your APR, and although they are rare, a decreased APR could be obtained under the precedent that your financial institution is working with you to help you repay your loan.
This could stem from a financial hardship or simply not having enough money at the time to repay your loan. To counteract bad credit, a bad credit auto loan can be applied for. These loaning situations are for those that have a credit score of 600 or lower. When applying for loans, if your score is below 600, it’s very likely that a loan corporation or business will simply pass you over. However, applying further for loans will actually hurt your credit score more, so to counter this you could visit Myautoloan.com. This site helps you connect with high risk lenders and nearby car dealers that can help you finance your new car.
An online auto loan holds many benefits to the average consumer. In one example, an online auto loan will typically beat out a dealer’s overall APR. As well as being cheaper overall, an online auto loan application does not incur fees, such as one may be subject to at a dealer’s. Many car dealers tack on application fees to squeeze that extra bit of cash out of the customer beforehand. In another example of why an online auto loan is more beneficial than an in-person one, you may find that the online application is considerably easier to fill out, since you do have the internet at your fingertips. Besides having the information needed to properly fill out an app online, you will also be able to work at your own pace to fill the application out. Lastly, the best part about an online auto loan would be that with most online auto loans, there is no down payment involved. Unlike at a dealership’s, an online auto loan steps around any down payments by working directly with the lender, as opposed to working through the dealer to find financing.
The availability of online auto loans comes from the emergence of online banking and financial institutions. Banks and several other businesses have become comfortable operating online, with some banks even performing loan interviews over the internet. In the case of online auto loans, banks and other financial aids can operate via online lenders to help people receive their loans through online transactions.
One of the benefits of applying for a car loan online is that the car loan application takes no time at all to finish. Whereas you would have to commute to the bank and then the dealership to fill out the paperwork involved with applying for a loan, you will not have to leave the house to fill out an online auto loan application!
The streamlined service involved in applying for an online auto loan comes from the plethora of online loan lenders that will work with you quickly and efficiently to find the best loan that you need. A simple search will reveal thousands of sites and lending services ready to help you on the spot and the applications are stress free.
As with all loans, whether they are for a car or house, when applying for a loan online, research it! The online loan rates can differ wildly depending on what bank, company, or business the online lender works with. In order to find the best APR on a loan, I would recommend searching various lender web pages, such as Up2drive.com or Myautoloan.com. These sites have APR estimates on the main web page and can give you a rough idea of what you are looking at paying for your monthly bill.
As with all loans, the APR is extremely important to take into account when looking at repaying your loan. The APR, or annual percentage rate, is the interest returned on your borrowed loan from the bank or financial service. These institutions can help settle your financial matters through a fixed APR, meaning an interest rate that cannot change, regardless of the bank’s situation.
A non-fixed APR means that the interest rate on the loan from the bank or in some cases, the dealership itself, would fluctuate at the end of a year. At the beginning of each year, the bank can either decrease or increase your APR, and although they are rare, a decreased APR could be requested and obtained under the premise that your financial institution is working with you to repay your loan. This could stem from a financial hardship or simply not having enough money at the time to repay your loan.
For car buyers with bad or no credit there are special bad credit auto loans available. These loans are for those that have a credit score of 600 or lower. When applying for loans, if your score is below 600, it’s very likely that a loan corporation or business will simply pass you over. However, applying further for loans will actually hurt your credit score more, so to counter this you could visit Myautoloan.com. This site helps you connect with high risk lenders and nearby car dealers that can help you finance your new car.
An online auto loan holds many benefits for the average car buyer. In one example, an online auto loan will typically beat out a dealer’s overall APR. As well as being cheaper overall, an online auto loan application does not incur fees, such as one may be subject to at a dealer’s. Many car dealers tack on application fees to squeeze that extra bit of cash out of the customer beforehand.
Another example of why an online auto loan is superior to a traditional in-person one, you will find that the online application is considerably easier to fill out. Besides having the information needed to properly fill out an app online, you will also be able to work at your own pace to fill the application out.
Lastly, the best part about an online auto loan would be that with most online auto loans, there is no down payment involved. Unlike financing at a car dealership, an online auto loan steps around any down payments by working directly with the lender, it also lowers your cost and rate and removes dealer mark ups.
Author and publisher since 1999. Articles, stories and commentary have appeared in national magazines and are published on the internet. Mr. Fabiano has also been a featured speaker at online publishing and affiliate marketing conferences in the US, Canada and Europe. I author the following consumer finance related sites and communities: Payday Loans [http://www.payday-loans-professor.com]
There are two offices in Washington that work together to put out a comprehensive report on mortgages in the United States. These are the Office of the Comptroller of the Currency and the Office of Thrift Supervision.
Their report is the Mortgage Metrics Report. In this report they track closely the number of loans where people are facing foreclosure and who are offered loan modifications and how successful these modifications are.
They look at the mortgages of nine national mortgage companies and three large thrifts. These twelve are responsible for 64% of the mortgages in the United States.
Their report is a quarterly report. Because the volume of loans is so great their report normally is finalized and released three months after the end of a quarter. Their most recent report was released in September of 2009 and covered the second quarter of 2009 which ended June 30, 2009.
There are numerous charts in this report. One interesting chart in the report for the second quarter of 2009 focuses on the percentage of people who default again on their loans after a loan modification was made. These are people who had their loans modified and were facing foreclosure again because they did not continue to make their modified payments.
The chart monitors 5 investors – Fannie Mae, Freddie Mac, Government Loans, Private loans and Portfolio loans. The nine national mortgage companies and three large thrifts service loans for Fannie Mae, Freddie Mac, the government (FHA and VA) and Private investors. Portfolio loans are those that the mortgage companies and thrifts have put up the money for from their own funds. They keep these in their own portfolio rather than selling them to one of the other four investors.
Here are some interesting items from the chart:
· Anywhere from 27.7% to 34.4% of people whose loans were modified for the other investors had failed to continue to make their mortgage payments 3 months after the loans were modified. Only 14.0% of the people whose loans were in the portfolios of the mortgage companies and thrifts had failed to continue to make the payments after the loans were modified.
· 40.2% to 49.8% of the people whose loans had been sold to the other investors and whose loans were modified had failed to continue to make their payments on time after 6 months. Only 28.7% of the people whose loans were in the portfolios of the mortgage companies and thrifts had failed to continue to make the payments after the loans were modified.
· The percentage of people whose loans had been sold to other investors and who had failed to continue to make their payments after nine months was between 49.8% and 58.3%. Only 38.7% of the people whose loans were in the portfolios of the mortgage companies and thrifts had failed to continue to make the payments after the loans were modified.
· The percentage of people whose loans had been sold to other investors and who had failed to continue to make their payments after twelve months was between 52.4% and 59.1%. Only 42.4% of the people whose loans were in the portfolios of the mortgage companies and thrifts had failed to continue to make the payments after the loans were modified.
None of the loans being tracked in this chart are loans where modifications were made under the Making Home Affordable Modification Program.
For each investor the percentage of people who fall behind on their payments and face foreclosure again increases the further they are from the date their loans were modified. A closer look at this shows that the percentages are fairly close and consistent for each of the investors except the Portfolio investor.
The percentages of people who are facing foreclosure again in the Portfolio category after 3, 6, 9 and 12 months are significantly lower than the percentages for the others. In the Mortgage Metrics report it is suggested that this may be due to differences in modification programs and the investor’s flexibility to modify the terms of the loan.
There May Be a Totally Different Reason
Portfolio loans are those kept by the mortgage companies and Thrifts studied in this report. These are loans in which these companies and thrifts invested their own money. The other loans they have sold to Fannie Mae, Freddie Mac, the Government (FHA, VA, etc.) and Private Investors on Wall Street. While the monthly payments are made to the mortgage companies and thrifts, they just pass it on to the end investor.
These mortgage companies and thrifts lose more money on loans in their own Portfolio that end up in foreclosure than they do on the loans they have sold to everyone else. It looks like modifications they are making on the loans in their own portfolios are more favorable than the modifications they are making on the loans of other investors.
Is There Anything in the Report to Support This?
There just happens to be another chart in the report which implies that the mortgage companies and thrifts are doing this. This chart shows the types of loan modifications that were done during the second quarter of 2009. Here is what that chart reflects:
· The mortgage companies and thrifts reduced the interest rate on the loans they modified in their own portfolios 84.1% of the time. This was higher than any other group. The interest rates were modified 77% of the government loans. Interest rates were reduced on 43.6% of the Fannie Mae loans modified, 51.3% of the Freddie Mac loans modified and 63.6%of the private investor loans modified.
· The mortgage companies and thrifts extended the durations of the loan to recover any reductions in payment on 72.4% of their own loans. They extended the term on 77.6% of the Freddie Mac loans. The percentages of the rest were lower – 47.8% of the Fannie Mae Loans, 46.4% of the Government loans and 13.1% of the Private Investor loans.
· The mortgage companies and thrifts reduced the principal balances on 30.5% of the loans they modified in their own portfolios. They did not reduce the principal balances on any loans for other investors.
· The mortgage companies and thrifts deferred a portion of the principal due on 4.7% of the loans they modified in their own portfolios. They only did this 0.1% of the Fannie Mae loans. There were no principal deferments on any loans for any of the other investors.
· The mortgage companies and thrifts only froze the existing interest rates on 5.5% of the loans they modified in their own portfolios. The percentages on loans where they froze the interest rates on loans for the other investors ranged from 5.9% to 16.6%.
Let’s define these terms.
· Rate Reduction – The interest rate on the loan is reduced.
· Rate Freeze – The interest rate on the loan is frozen at the level it was at.
· Term Extension – The length of the loan was extended to recover any reductions in payment.
· Principal Reduction – The amount still owed on the loan was reduced.
· Principal Deferral – Some of the money owed was deferred to the end of the loan.
This chart clearly indicates that during the second quarter the mortgage companies and thrifts took action to give more favorable modifications on the loans in their portfolios than on the loans they sold to the others. This is clearly indicated by the fact that they reduced the interest rates on 84.1% and extended the terms on 72.4% of their loans. They also reduced the principal on 30.5% and deferred the principal on 4.7% of their loans.
The surprising thing here is the 30.5% principal reduction on the loans in their own portfolios. The mortgage industry has consistently fought against legislation proposed in congress to give judges the power to do this. Yet they are doing it on their own loans.
The mortgage industry has been lobbying that loan modifications don’t work. They regularly say that while modifications may temporarily postpone a foreclosure, the majority of people will fall behind on their payments and face foreclosure again. Yet these charts don’t show that. They show that almost 60% of the people facing foreclosure whose loans are in the portfolios of the mortgage companies and thrifts have been able to stay current on their modified mortgages twelve months after they have been modified.
It looks like more pressure needs to be placed on mortgage companies to modify all loans in the same manner as they are modifying those loans in their own portfolio.
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