Loans For People With Bad Credit

personsl Loans for People with Bad Credit History


Realistic Loan Options for People with Bad Credit

Daniel Boortins, a well-respected historian once said, “it is hardly an exaggeration to say that the American standard of living was bought on installment plan”.  What happens to that standard of living when a consumer’s credit rating is so bad that lender’s refuse to give any more credit? Simple, the consumer uses another financial tool known as a loan. But first the consumer must be familiar with loans for people with bad credit, because those will be the only type of loans that the consumer will qualify for.

A loan is an agreement that can be entered into by natural or juridical entities, whereby money, property or any other type of asset is given at a predetermined or determinable future date by a lender to a borrower. The latter agrees to return the thing borrowed or its equivalent usually along with interest at some future time and in most cases on installment.  For example Mr. C lends five hundred dollars ($500.00) to Mr. B. with the understanding that the latter will pay the former the entire amount with ten percent (10%) interest, in five (5) monthly and equal installments starting January 1, 2012.  Therefore Mr. B has to pay Mr. C. one hundred ten dollars ($110) on the first of each month for five (5) months, starting January 1, 2012.

Consumer Credit is an indicator used by creditors to determine how much of a risk a consumer is in defaulting on a loan.  A poor credit rating indicates a high risk, and lead to higher interest rates, or the denial of a loan application. Therefore, loans for people with bad credit are limited by the calculated amount of risk a lender or creditor might be willing to accept.

Borrowers have to accept the reality that the provisos contained on loans for people with bad credit will not be as favorable to them as opposed to loan options for people with excellent or good credit. For example, Mr. A and Mr. B each take out a three hundred thousand dollar ($300,000.00) thirty (30) year fixed rate loan. Mr. A with excellent credit, which means a credit score of around seven hundred sixty (760) to eight hundred fifty (850) can expect to pay around five point seven percent (5.7%) interest, amounting to more than seventeen thousand dollars ($17,000.00) in interest payment. Mr. B who is a consumer with damaged credit, around five hundred (500) to five hundred seventy nine (579) can expect to pay nine point five percent (9.5%) in interest, amounting to around twenty eight thousand dollars ($28,000.00) in interest payment.

There are only a few types of loans for people with bad credit. First would be repairing their credit rating before taking out a loan.  This option is only available consumers whose credit rating is within reach of the required credit rating and who still have enough time.  For example, Mr. A has a five hundred seventy five (575) credit score and he applies for a car loan from Bank of B.  The latter is requiring a five hundred eighty (580) credit score at the very least.  Since the difference is only five (5) points and Mr. A has several disputes on his credit report, plus several bills due which he can pay on time, then it is worthwhile for Mr. A to repair his credit rating first. A delay of a few months may be better than a loan denial since this might also be taken into consideration by other lenders in the future.

Another one of the loans for people with bad credit would be to take out a loan with a cosigner who has excellent credit.  A cosigner is a person who signs the contract of loan together with the principal borrower and is considered a co borrower on the loan.  The excellent credit rating of the cosigner may be enough to compensate for the poor credit rating of the principal borrower.  This option is considered by some as one of the better loans for people with bad credit but is only realistic if the principal borrower can find a willing and sufficient cosigner for a loan.

A third loan option for people with bad credit is to consolidate and negotiate all debts and take out a single loan to pay off all overdue bills.  While most people will question the wisdom of taking out another loan and incurring another debt to pay off other debts, this is a viable option if the debt consolidation is done properly.

First, the consumer has to research lenders who are reliable and whose loan terms fit the earning capacity of the consumer.  Reliability is the key because some lenders will offer loan terms that are unrealistic and may even force a consumer to pay off only the interest while leaving out the principal amount. Reliability can be done thru research and cross referencing lenders with government and non government agencies that monitor lending institutions like the fraud department of a county or the Better Business Bureau (BBB). Second, the consumer must make a realistic calculation of their monthly income and expenses including emergency expenses for at least six months.  Whatever amount is left is the monthly loan amortization than the consumer can afford.  This will be the only time a consumer researches for reliable lenders.  Third, negotiate for a reduction of the principal amount and the condoning of interest and penalties.  Oftentimes all it takes to reduce a debt is to write a simple hardship letter or to plead with the debt evaluator.

In closing, there are still a few available loans for people with bad credit and these loan options can actually work, but the consumer must make sure to be religious in following a set income and expense, then properly researching the loan terms then asking for consideration from creditors. This is because being smart and choosing the right partner can spell the difference between being debt free or filing for bankruptcy.


Loans For People With Bad Credit

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What is a Good Credit Score

  • What is a Good Credit Score?
  • What is The Credit Score Range?
  • What is The Credit Score Scale?
  • What is The Average Credit Score?

Let’s take a look at the credit score breakdown

Most people know that their credit score plays an important role in their lives. This is the easy part, the more difficult part is actually understanding the credit score breakdown, or what goes into a credit score. There are a few different methods for calculating credit scores but the most commonly used is the FICO method that has been used since the 1980’s. The FICO method was developed by the Fair Isaac Corporation and the three big credit bureaus, TransUnion, Equifax and Experian, all worked together with Fair Isaac to develop this method.

For more information on FICO credit score please read here

FICOFICO credit score range


A persons credit score can range anywhere between 300 and 850. The average American score is around 690 which is a reasonably good score. Having the average score of 690 will enable you to secure a loan, however it will not get you the best interest rate on your loans.

Let’s take a look at the credit score breakdown.

The first factor is payment history. Payment history makes up 35% of the credit score. This is calculated based on whether you pay your bills on time or not and how many late or missed payments have been forwarded to collection agencies. It also considers if you have had any bankruptcies or tax liens. It can be difficult sometimes to meet financial deadlines if you get a heap of bills all come in at once but just remember that a missed payment is much worse than a late payment regarding your credit score. Missing a mortgage payment will affect your credit score much worse than missing a bill payment or credit card payment so always have your mortgage payment as first priority.

Next there is outstanding debt to consider and this accounts for 30% of your credit score. If you have a number of credit cards and they are all maxed out then this will have a very negative effect on your score, but if you have a number of credits that all have a lot of credit still available then this will work in your favor. Outstanding debt considers the amount of credit outstanding in relation to the amount of credit available to you. It can help your credit score to have a few credit cards that are not being used but simply to give you available credit to increase your score.

Credit Longevity is the next point that is considered when determining your credit score. How long you have established credit counts for 15% of your score. The longer you can maintain good credit and continue to pay your bills on time then the better it is for your credit rating.

Next there are the types of credit to consider. Around 10% of the score is related to the number of different types of credit that you have. If you have multiple types of credit, such as mortgage, car loan and credit card, and all are managed well then this will help with your credit score.

Amount of activity is the last factor to consider. Opening new credits card accounts to leave unused to increase your credit score is good, but not if you open too many new accounts at once. If you have too much activity happening in a short period of time this will negatively affect your score.

When you understand what is involved in the credit score breakdown then you can take steps to improve your score.


What is a Good Credit Score

Loans For People With Bad Credit

The Truth About Debt Consolidation Loans


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Category: student loans

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Unfortunately, the cost of getting a quality, post-high school, education rises every year. Spending tens of thousands of dollars per year on college tuition, for even state run universities is now the norm, and private university tuition is even more. What this means is that most students are going to have some amount of school loan debt by the time they graduate. The average student loan debt accrued by graduation seniors is $19,237.00.

So after graduation, what are the available options for graduates with multiple loans and a pile of debt? School loan consolidation can be a smart option by lowering your interest rate and combining all outstanding loans in to a new school loan with a lower annual percentage rate. However it’s a good idea to take your time and compare the various lenders and resources, and be sure to discuss your options with your parents or a financial advisor before actually applying for school loans.

So what is loan consolidation? School loan consolidation is the process of taking your current school loans, and paying them off with one new consolidation loan. Students who have gone to school for 4+ years, and received Federal student loans will have amassed a large, deferred loan balance by the time they graduate. In many instances, several types of loans will have been used, with various interest rates and monthly payments. A school consolidation loan pays off all of these loans, and gives you one, easy payment to a single lender. This makes it easier to keep track of your payments. More importantly, it means you only have to deal with one creditor if you’re late with a payment or need to renegotiate your loan for some reason.

Obviously, if you can keep your loan debt down in the first place, you won’t have the stress of large school loan debt obligation after graduation. Instead of going to your local community college for your pre-requisite classes and spending $25 a unit, many students feel they have to go to the 4 year university straight out of high school. Many end up returning home and going to a C.C. anyway, but attending a local school first is a good way to save money, and get those required classes out of the way cheap. After you’ve completed these courses, transfer to a 4 year school to complete your undergraduate degree. This will save thousands upon thousands of dollars that you would have racked up on student loans, and been paying off well into your 30’s.

So many bad financial decisions students make is a result of poor financial education. Students have not been taught by their parents or high school teachers the importance of maintaining a good credit score, paying bills on time, and budgeting income. Wise spending during the college years will ensure that the money you make after graduating will be spent on things you want, not credit card payments, collection companies and school loans.

For more information about consolidating your current school loans visit School Loan Consolidation Information & Resources

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Category: student loans

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The benefits of quality continued education cannot be understated in a culture that constantly evolving to meet new technology and business challenges. For both parents and professionals, locating a solid financial resource for further educational opportunities has become almost mandatory. Certainly, for parents the goal is to provide their children with a college education that give them more opportunities than they, themselves, had. For professionals, in business or other areas, the need to stay relevant to the changing needs within that profession prompt the search for education. Yet, in either case, the costs associated with secondary schools and technical institutes can be immense.

There are various types of assistance available for people who want to further their education, some government-funded while others come by private means. For anyone who needs student loans or other financial aid to pay for school or educational training, there are programs that make this possible. It is not only possible but it financial assistance is made widely accessible and affordable. Student loans are perhaps the most widely used form of educational financial assistance although scholarships, work-study program, and family contributions do play a significant part as well.

What are some of the reasons why student loans may still be one of the most attractive options out there? Certainly, the first point you could make is that borrowers will not be required to pay back the student loan until after your complete your education. This means the payments will be deferred. Beyond this obvious advantage, there also others associated with interest rates and payment terms. Many of those lenders who offer student loans do so at lower interest rates than other types of loans. Also, lenders are more apt to work with student borrowers by making repayment terms flexible. Charges on interest rates for student loans may also be deferred until after a student finishes coursework and start paying the loan back.

There are two main types of student loans offered by the United States government. The first one is the Stafford Loan. With this loan, any funds for tuition and enrollment costs for the college or university are given to the borrower by banking institutions or lending companies that have partnered with the federal government. The second type is called the Perkins Loan. This loan is offered directly by the school or university, which operates directly as a lender.

Specific application processes are associated with received student loans or financial aid from governments or schools. Yet, for many professionals the ways they receive financial aid make come from taking out personal loans as student loans. In some cases, a student loan may come from the professional’s employer who wants them to have updated training and expertise.

There are definitely many options to consider. If you desire more information, you will have to do research to see what student loan opportunities may be available to meet your circumstances. You owe it to yourself to pursue further education and possibly help yourself but your children as well.

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Category: student loans

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The beginning of college is one of the most exciting times in a young person’s life, and pursuing student loan consolidation can make it even better. If you are like most students who want to avoid the interest of several different loans, consolidating your loans makes a great deal of sense.

It will allow you to save money over the long haul and will simplify the payment process when it comes time to repay your lenders.

Why Choose Student Loan Consolidation?

Student loans are used for every variety of educational opportunity. You can apply for a loan if you are going after your college degree, and you can apply for loans if you are attending graduate school, law school or any other type of professional training.

If you need a loan to pay for your education, you’ll eventually have to pay it back in full. If interest rates go up and down during the time you are in school, this could make your future student loan payment enormous.

Most lenders will allow a grace period of up to six months before you are required to start paying back your student loan. Many people choose this time to consolidate student loans because the interest rate is usually lower during this grace period.

By consolidation, you will lump all of your loan payments together, giving you one loan payment to make to one lender. Over time, this can save you money because consolidation allows you to lock into a lower interest rate. Having a lower interest rate can end up saving you thousands of dollars over the years you are paying off the loan.

What are the Drawbacks?

The big drawback when you choose to consolidate student loans is you’ll have to start making payments immediately. This is especially true if you use the grace period to lock into a lower interest rate. If you have not found a job yet, this could be difficult to accomplish. For those already working, it would be an easier choice to make.

It is important to go over all your options when choosing a lender for student loans. Even if you have to start making a student loan payment immediately, you will still save yourself more money in the end because of the lower interest rate.

What to Consider?

There are many things involved in figuring out how to go about your student loan consolidation. With all of the lenders who are available, you should take the time necessary to research your options.

One thing that you will want to find in a lender is a low interest rate on a student loan payment. Doing so will give you the ability to get the most mileage out of your money.

Not every one who has borrowed money for college needs to look into a student loan consolidation. However, it can only benefit you to look into it. It will give you an opportunity to lower your payments and decrease your interest.

Paying back your student loans will be difficult enough – consolidation just might be the trick to making it less complicated.

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Category: student loans

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In today’s competitive workforce a post secondary education is a necessity to obtaining a quality job. A four year degree at a Canadian university will cost you around $55,000 in present day 2008. With the cost of education increasing at a rate greater than inflation, the cost of education for a baby born today who is expected to enter post secondary education in 2026 will be approximately $116,000.

For the average Canadian family that represents a substantial amount of money. So, how can Canadians ensure they are prepared when it comes time to send their child off to a post secondary educational institution? The answer is to start saving early and take advantage of registered education savings plans (RESPs).

An RESP is a special savings account designed specifically by the Canadian Government to optimize savings for education. Anybody may open an RESP account for a child including a parent, grandparents, relative or family friend. The person who opens the RESP account is known as the Subscriber and the child for which the savings is for is referred to as the Beneficiary.

Benefits of an RESP

There are many benefits to opening a RESP account such as.

Money contributed to the RESP account is allowed to grow tax free

There are several Government Grants available to increase your education savings

Withdrawals from the RESP account are taxed at the child’s marginal tax rate which is often 0% resulting in substantial tax savings

Government Grants

The government of Canada will help you save for your child’s education through government grants.

The Canadian Education Savings Grant (CESG) is a grant offered when you contribute more than $500 a year to your child’s RESP account. You may receive up to an additional $400 a year through this grant with a lifetime maximum contribution per child of $7,200.

The Canada Learning Bond (CLB) is another grant offered by the government of Canada aimed specifically at low income families. The Canadian Learning Bond is only available to children born after December 31st 2003 and is limited to $2,000 per child.

RESP Providers

Selecting an RESP provider is an important choice. Most banks and other financial institutions such as credit unions offer RESP accounts. As well there are specific companies that specialize in only selling RESP accounts such as Heritage Trust and Canadian Scholarship Trust.

Steps To Opening A RESP

To open an RESP account follow the steps listed below.

Ensure your child has a social insurance number (SIN)

Select an RESP provider

Decide of the type of RESP account that you wish to open

Select investments that will grow your savings

Contribute money to your RESP account


Registered Education Savings Plans are a smart way to save for your child’s future post secondary education. Start saving early and you’ll ensure that your child will have the opportunity their post secondary institution of choice and graduate with a minimized debt burden.

RESP Resources

Visit for a complete guide on Canadian RESPs.

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Category: student loans

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The world of funding a college education is complicated and complex at first glance. A little research will go a long way in allowing you to get the best rates on private student loans for your college career.

Start with learning about the recommended lenders provided by the financial aid office of your school. Do not simply take their list and start applying. You must ask how they determined any ranking, and why they included each company. Remember that one bad apple does not ruin the bunch. Not all financial advisors are being paid off by loan companies, and now more than ever the are under close scrutiny by the federal government. If the school does not seem open to discussing their reasons for choosing particular companies, disregard their ratings.

Many financial aid advisors, though, are doing their jobs well. They focus on finding the best private lenders and rate them according to the rates and terms they offer, as well as their customer service capabilities. Take these lists, and research the companies online.

First take a look at their home website. These should offer a general quote for an annual percentage rate. If the home page does not disclose a clear rate, it may not be the best company to choose as full disclosure is important.

Then look at a web search for the company. Using the Better Business Bureau, and other reporting agencies, find out if there is a high rate of customer complaints. If there are, you should also try to read through a few of the comments left. The people complaining can sometimes just be angry that they were not able to get an exception to a policy they would have liked, or were sent to a collection agency for non-payment. Decide if the complaints seem like legitimate issues or the person’s inability to accept responsibility for their part in a situation.

Private loans are generally offers that are made with the borrower’s credit score being a large contributing factor. Arm yourself before negotiating a loan by finding out your personal credit score. If possible, correct any negatives beforehand. Be sure to double check information for accuracy, so that you are not discredited for mistakes by the credit agency, and subsequently offered a higher annual percentage rate.

Also be aware that if you are trying to shop around for the best rate, try to limit the number of applications you place. Narrow down your search to the best two or three options of lenders, because you will usually have to apply for the loan before being given the actual rate offer. More credit inquiries will subtract from your credit score, so do as much research as possible before actually applying.

The ideal FICO score for getting the best private loan offer is currently 780. This will most likely allow you to secure the lowest annual percentage rate available. Scores that are lower, such as 600 or less, will often be denied for a private loan. The score designates too much risk for the lending company, and they often do not want to incur the expenses later on that it will take to collect the debt from someone who has already shown a tendency to pay late or not at all.

Finally, when you have been offered a rate that you believe is manageable, and you are sent the disbursement check, there will be something called a “Truth-in-Lending” disclosure along with it. Be sure you read this document, and fully understand the details before you actually cash the disbursement check. If there is anything that looks different than the original agreement, or you don’t understand a particular term, FIND THE ANSWER. The legal binding of the loan contract is dependent on this document being agreed upon. By cashing the check, you are agreeing to the term set forth in the disclosure. Make absolutely sure you are getting the rate you agreed upon.

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Category: student loans

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Well, it was nice while it lasted. You got the money for your tuition, finished that last semester, and now you have graduated, diploma in hand. However, in the not so distant future, the glow will wear off, and you’ll be facing the repayment of all those loans. While you have managed to allow your payment and credit history to suffer while you’ve been focused on your studies, those bad credit repayment demands on those loans won’t go away. First year college students usually acquire student loans without too much trouble. It’s the third and fourth year students who are often plagued by bad credit, and then must resort to finding bad credit student loans.

Such loans are extremely difficult to find and obtain, and come with astronomical interest rates. If you’ve defaulted on any loan, you may be faced with increased interest penalties, or in some cases, immediate demand of repayment. Defaulting on a loan means that you haven’t complied with repayment terms or if you’ve gone way past due payment dates. Defaulting on a loan, especially a bad credit student loan, comes with severe repercussions.

The first thing you may face is a letter requesting the immediate repayment of the loan, and you will lose your option of making payments in installments, or even deferred payments. Finding student financial aid in these circumstances will be extremely difficult, especially if you’re seeking any Federal funding such as a Perkins Loan. In addition, your account may be turned over to a collection agency and you will more than likely have to pay additional fees as well as interest charges, late fees, collection costs and even, if you’re really bad, court costs.

That’s just the beginning. If you don’t pay a bad student credit loan, or any loan for that matter, your account may be referred to a national credit bureau and your credit rating can be damaged for years to come. Try buying a car, furniture or obtaining a home improvement loan with that hanging over your head. You may even have difficulty renting an apartment, as landlords run credit checks on prospective tenants and if they find that you are consistently late in making payments or if you’ve defaulted on any debt, they may deny you. Having bad credit can even affect future employment, so all that hard work studying may likely be useless if you don’t take care to repay your student loan debts on time.

In severe cases, the IRS may garner any future income tax refunds for repayment of loans, so avoid missing payments or defaulting on any loan if at all possible. Before you ask for a student loan, think about the future and repayment. If possible, start a separate savings account and start tucking money away in an effort to get a jump on the repayment of any student loan, good credit or bad, so that you can avoid the disaster that has met thousands of graduating students. Don’t let that college education go down the drain. Think ahead, play it smart and put those brains to some good use. Plan ahead when it comes time to find, and repay, any type of student loans.

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Category: student loans

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When it comes to attending college, one needs to spend a lot of money. The money is spent for various tasks such as purchasing forms, books, preparation for exams, tuition fees and lot more. This results in a lot of students getting in to serious debt.

The reason is that most students don’t want to be a burden on their family. They want settle their dues individually. This leads to borrowing of money from private lenders, friends and various financial institutions.

However, most students are not aware of refinancing student loans. These are a boon for students who have taken a loan to pay off their college dues. There are several advantages of refinancing student loans. The main benefit is that you can easily save hundreds and thousands of dollars before you actually start repaying all your loans.

Unfortunately, most students don’t consider availing the superb benefits of refinancing. This is the reason that they tend to get in to serious debt by the time they graduate from their college.

Most students must also have noticed that as soon as they leave college, there are more chances of a student to have many loans on the books with series of different interest rates attached to each one.

When it comes to refinancing the student loan, you would be highly benefited by lower interest rates. If not lowering these rates to a greater extent, you can easily bring some of these rates down to a certain amount.

This ultimately provides you discount on payments you give towards each month. You can really save a lot of money towards the end. In case it is not possible to lower all of your interest rates or refinance them, there are good chances for you to save a lot of money in certain areas.

When considering to refinance your student loan, it is very important to find the reliable source. The World Wide Web is known to be a great place when it comes to finding a reliable refinancing dealer. There are several websites that work towards providing you the best when it comes to refinancing loan services. The internet will prove to be your one-stop-shop solution for refinancing your student loans from the college.

However, you also require to be really careful as there are several non-credible websites that may actually steal a lot of money out of you. It would be wise to check out with the Best Bureau Services about the credibility of the website prior to dealing with one.

The main purpose of refinancing is to reduce your monthly student loan payments. Here are certain things you need to consider when it comes to refinancing your student loan:

a) You need to finance private and federal loans individually. The reason is that federal loans are structure in a way that you can get reduced interest rate. Private student loans tend to increase their rates with more education. Mixing the two will end up in paying a higher interest rate on the combined principal.

b) Student loan rates usually vary from one lender to the other and the company you tend to take the loan from. Make sure that your credit history is perfect prior to applying for any such loan.

Refinancing your student loan will let you enjoy lower interest rates and save you a lot of money.

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Category: student loans

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Student loan refinancing was not something I thought of upon receiving my master’s degree. I thought only, “Finally I’m finished with 50-page papers!” However, at age 29, I wanted to move permanently to Estes Park, Colorado. Enamored with Rocky Mountain National Park and with the high desert climate, I wanted to buy a cabin in the woods.

Unfortunately, I owed money, a lot of it. After graduate school my loans totaled $24,000, which doesn’t seem like a lot to folks who go to med school, but to someone such as me, who was used to living on the road, making less than $20,000 per year, $24,000 seemed astronomical. To make matters worse, my loan payments were hundreds and hundreds of dollars. There was no way I could pay a mortgage with my monthly payments.

So I did some research, talked with a bunch of people, and found out that I actually could do something about my situation. These words came up over and over again: student loan refinance. Why not try it at least? It couldn’t be that difficult.

It wasn’t that difficult, although it was definitely time consuming, and I had to do extensive research to really find out the good deals. I found a number of websites, including, which notified me that “the main goal of refinancing is usually to reduce your monthly student loan payments.” Exactly what I needed.

As the site states, it’s always better to start with good credit, so if you don’t have good credit, work on that first. I checked with the credit bureaus, TransUnion, Equifax, and Experian and discovered that although I didn’t have great credit (mostly because I never had a credit card), I didn’t have bad credit either. I was in good shape to get a fairly decent, low rate.

The next step I took was finding a lender that specialized in student loan refinancing. recommends a number of sites. I ended up with the National Education Loan Network (a.k.a. Nelnet), which I used to reduce my monthly payment in three ways: I got a lower interest rate to lower my long-term student debt, I consolidated two school loans that I had, and I extended the duration of my loan. I also took advantage of a special offer to have the money taken directly out of my checking account, which lowered my interest rate even further.

Although it took a few months to get everything in order, the outcome worked to my advantage. I ended up with $123.50-per-month payments, which is entirely reasonable. These low payments enabled me to save quite a bit of money each month. I’ll be paying my loans off for longer–about 20 years; I’ve got 17 left–but I finally was able to save enough money up to buy a home and not worry too much about my mortgage payments.

Granted, I did get lucky. I consolidated my loans before July, 2006, at which time the consolidation rates jumped a few percentage points to match the current market rates (which rose significantly and steadily last year). However, it’s still very possible to lower your loan payments.

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Category: student loans

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Your Main Goal

Before you begin thinking about how to refinance your student loan, think about what your real goal is. Most people in your position will want to reduce their monthly costs. Others may simply want to consolidate all their loans into a single payment. Whichever way you go, you’ll want to set a goal before you begin planning.

That said, when you refinance your student loan there are several things to consider.

First things first

Regardless of the lender you work with when you refinance your student loan, there will be certain qualifications you will have to meet. One almost universal qualification is that none of your outstanding loans are allowed to have what is called “in-school” status. In other words, you cannot be currently paying for your education with an active loan.

Another requirement is that many lending institutions set a minimum balance. That amount will vary from lender to lender, so make sure you know upfront what that balance is before you spend too much time with that lender.

Two ways to refinance your student loan

When you refinance your student loan you can reduce your monthly payments one of two ways:

Getting a lower interest rate

Extending the duration of your loan

Most people will try to get the lowest interest rate possible because this will mean you will pay far less in total interest costs by the time you have paid off your loan.

That said, if you can’t get the lowest interest rates you should consider the refinance of your student loan by extending the term of your loan. When you do this, your monthly payments will be lower. The downside is that the total dollars you pay for interest will be substantially higher. So, as stated above, you need to set your priorities before you begin implementing your plan to refinance your student loan.

Federal vs. Private Loans

Like many other people, you may have more than one type of loan; some being private loans and others being Federal loans. Because of the way Federal loans are structured, you can get a much lower interest rate on them than you can on private loans. On the other hand, private student loans are basically personal loans made with the assumption that your income will increase with more education.

That said, make sure that you refinance these student loans separately. If you consolidate these types of loans into a single package, you may find yourself paying much more on the combined loans than you need to.

Your Credit Score

Before your refinance a student loan be certain that your FICO score is high enough to make you a solid bet to the lending institution of your choice.These days no one has an excuse for not looking at their credit report — you can get a free copy of it every twelve months from each of the three major credit reporting agencies. Do it now. Then take the time to review your credit report. If you find inconsistencies or problems, clear them up now. It will pay off in lower interest rates and better terms when you finally refinance your student loan.


Ultimately when you refinance your student loan, your goal should be to make your career — and the rest of your life — more manageable once you leave school. Be intelligent about investigating all the choices you might have before you make an informed decision. If you’re careful, you won’t be bogged down for the rest of your life paying back your loans.

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Category: student loans

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When the student loan payments begin to fall due, and you find yourself overwhelmed with monthly payments, you have to consider how you’re going to handle the load. You certainly can’t let the loans just slide and hope they go away because that is most definitely not going to happen.

The easiest way to reduce the amount of payments and interest on your student loans is to research the different programs that are available for student loan consolidation. There are several consolidation loan options available for student loans from Federal student loan consolidation to private student loan consolidation, and how much you are able to accomplish will be based on the policies of the lending institution. Some of these loans start as low as 2.75% with terms anywhere from ten years to twenty-five years based on the amount of the loans that are being consolidated.

Another tip to keep in mind as you research the means for obtaining a student loan debt consolidation loan that there are different programs available. The federal student consolidation loans do not always require proof of income or a credit history/ As such, these type loans are a perfect fit for students who are just leaving college and have not yet become settled in their career choices. This type loan can make a difference of up to $300 monthly on loan payments depending on how much is borrowed in comparison to what the original payments were. The difference in payments can help the student get settle into a home and career instead of struggling to make ends meet while repaying numerous student loans.

The student debt consolidation loans that are not backed by the government have a slight higher interest rate that oven starts at about 4.5% and caps at about 6.25% depending on the state. In addition, these loans require good credit as well as income sufficient to make the payments. Some of these loans allow repayment terms up to about thirty years depending on the amount of the loan. For those who have completed their degree and are settled into their career, this type of loan can ease the burden of paying back all of the numerous student loans.

When you begin to look for a student loan debt consolidation loan, you have to do some research and find the one that best suits your individual needs. You want to be sure that the plan you choose is going to allow you to make the payments on time as well as paying all of your other post-college obligations. Be careful not to accept the first deal that sounds like it fits your needs. Do some investigation and get quotes from three to five lending institutions before you make the final decision. By doing this you allow yourself the opportunity to see what other lenders have to offer and can choose from the most attractive package. After all, college costs are expensive, so consolidating those loans is a rather substantial amount of money. A difference of .25% over a term of ten years can make a tremendous difference in the final amount that you will have to pay back.