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Refinancing student loans
With interest rates expected to rise over the coming years, many students may find themselves unable to pay off their student loans early or at all. If you have student loan debt, refinancing may help reduce your monthly payments. To get started, check out our guide to refinances, below.
Fixed vs. variable rate loans
A fixed-rate loan offers a single payment amount throughout the life of the loan. A variable-rate loan charges different amounts based on current market interest rates, giving borrowers the option to lock in a low interest rate if they choose.
There are two major categories of federal student loans: Direct Subsidized and Unsubsidized Stafford Loans; PLUS loans are only available to parents of dependent undergraduate students. You can use the table below to determine which type of loan makes sense for you.
How much do I need?
The amount of money you borrow depends on how long you expect to attend school, your family’s income and whether you plan to work while attending college. Your repayment period will also affect the amount you owe. Repayment plans start after 6 months, 1 year, 2 years, etc., and last between 10 and 30 years. The longer your repayment term, the lower your monthly payment will be (but, the more you’ll end up paying back).
What about Private Loans?
Private education loans are offered by banks, credit unions, and online lenders. These loans don’t go through the Federal Government and therefore aren’t included in the FAFSA. However, you might still qualify for them.
Refinance Student Loans
A student loan refinance is a good way to lower monthly payments if your interest rate is higher than what’s currently being charged. When your interest rate is lowered, you have more money to dedicate towards your debt repayment plan. There are many different types of loans that you can apply to get a lower interest rate. In some cases, refinancing is even free! For example, at Discover Bank, you may be able to get a 0% APR (Annual Percentage Rate) for 12 months after paying off your principal balance. 2. Payday Loan
A payday loan is similar to a traditional bank loan. However, unlike a traditional bank loan, a payday loan is unsecured and has no credit check. Instead, a payday lender will look at your pay history and how much money you make per month to estimate how long it would take you to repay the loan. Most payday lenders require that you repay the full amount of the loan within two weeks of receiving your funds. However, some lenders allow borrowers to roll over their loan for additional 2 week periods. If you don’t repay the entire amount before the due date, you’ll accrue extra fees and charges, including late payment penalties and possibly collection agency fees.
Federal Stafford Loan
The federal government offers several types of financial aid programs intended to help students finance their college education. These include the Federal Pell Grant Program, Federal Supplemental Educational Opportunity Grant Program, and the Federal Work Study Program. While these grants do not cover the total cost of attendance, they do provide access to cash that can be utilized toward the remaining costs associated with school expenses, like tuition, room and board, books, and transportation. Students who qualify for federal need based assistance should pursue the highest level of financial aid offered by their institution.
Income Based Loan
Income Based Loans are a type of private loan where you repay the lender according to how much money you make. Like with salary advances, the borrower repays only when he or she receives income. There are three primary advantages to an income based loan: 1) You avoid going into default; 2) You don’t have to worry about how big a cushion you need to save for each paycheck; and 3) Your salary may increase overtime, allowing you to pay back an increased portion of your debt. Before taking out any loan, however, borrowers should first consult with their personal financial advisor.
Private Student Loan
Private student loans differ from federal loans because the lender does not guarantee repayment. In exchange for loaning money, the lender takes ownership of the student loan for the duration of the course of study. After graduation, the lender works directly with the graduate�s employer to collect the outstanding debt. Unlike federal loans, private student loans cannot be discharged through bankruptcy. However, students should consider seeking professional counseling prior to borrowing private student loans.
Refinance Student Loans
Refinancing student loans can save you thousands over time. While most people do not think about refinancing their debt until they have already gone over their original loan amount, borrowers can take advantage of lower rates and payments when they refinance their loans early.
There are several options for refinancing student loans, including federal consolidation programs, private companies offering student loan consolidations, and direct lenders offering low-rate personal loans. Depending on what type of plan works best for you, you may be able to cut down on interest rate, shorten your repayment schedule, and even reduce your monthly payment.
When looking at different options for refinancing student debts, make sure that you compare rate quotes, fees, and payment plans before deciding which option is right for you. You could end up paying a lot more than originally anticipated if you go with one company instead of another.
Refinance Student Loans
Description – Refinance student loans into cash fast for college and save money! Save $100’s per month at www.studentloansforprofit.org
How To Pay off Student Loans
FAFSA (FreeApplication for Federal Student Aid): College students need to fill out the Free Application for Federal Student Aid (FAFSA) to see what programs they qualify for. Each school uses their own rules about qualifications so submit the filled out FAFSA as soon as possible.
Income Based Repayment (IBR): Basically if you make less than a certain income a year, you pay back a percentage of your subsidized loan over time. A disabled military veteran may be able to choose between having interest cover payments paid and being entered into IBR.
Refinance Student Loans
College student loans (direct) – Refinancing student loans is not something I would do personally, but if the need arises it could be done. Generally speaking though, it is best to take out smaller amounts at a time and make sure you can afford it before doing any borrowing.
Car loan – There are two things that could help you here: first, refinancing car loans is becoming easier due to auto loans being bundled together with home loans as well as the fact that interest rates have been low recently. Another thing you can try is to look into getting some kind of high-limit credit card, then paying off the balance each month instead of the minimum payment. That way you won’t get hit with a huge interest rate hike if you carry a balance over the limit.
If you’re looking for a job, try using a recruiter who specializes in finding jobs for people with criminal records. Many state bars let you reapply after a certain period of time if you’ve paid any fines or fees.
Home equity loan – If you can refi your house and lower your monthly payments, then that’s great. If not, don’t worry about it. You’ll still be able to pay the bills and you’ll have a nice place to live.
Personal finance training – Most schools offer personal finance courses on campus. These classes teach students how to manage their money and budget properly. Also, they teach them how to use a spreadsheet (like Excel), how to keep track of their spending, etc.
Credit building – If you’re going back to school, you should probably start thinking about ways to build good credit. Just keep making the minimum monthly payments on your current debt and eventually you should end up with a history of responsible behavior on your record.
Online banking – A lot of banks now offer online banking options where you can check your balances, transfer money between accounts, set up alerts, etc.
Budgeting – Have you ever heard of the term ‘budgeting’? It’s basically keeping track of what you spend and saving money while you’re saving up for something. Use software or apps for smartphones to help you keep track of your money.
Saving – Save 15% of everything you earn! Even if you only save $20 per week, you’d have saved almost half of your income in just 4 months.
Investing – Investing is a big topic right now, especially since many people lost money in recent years. But investing doesn’t always mean buying stocks or real estate – sometimes you can invest in yourself, such as learning a new skill or taking a class.
Working full-time – Not everyone can go back to college or finish school and become a doctor or lawyer. Sometimes you can find work that pays even better than your old job and still give you plenty of free time to pursue your passions.
Making friends – Find people who share the same interests as you and hang around with them outside of school. That way you can talk shop and stay motivated.
Going to events – If you like music, sports, movies, art, etc., there are tons of places where you can go to meet people who share your tastes. You might even find someone who wants to start a band with you.
Volunteering – Volunteerism isn’t just for seniors anymore! Get involved in local organizations and you’ll soon meet people with similar interests.
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