Loans For People With Bad Credit

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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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As you decide to go for one of those Federal Student Loan Consolidation plans you may be concerned about the interest rates you have to pay. Although the plan as well as the interest rates are largely regulated by the federal laws in force, you may also have a close look and make an in depth study of the plan you have opted for.

Student loan interest rates under the Federal plans are ordinarily determined on the basis of the average of all student loan interest rates taken together. The rate of also fluctuates periodically. For example the Federal Student Loan Consolidation interest rates during July 1st 2006 to June 30th 2008 were 6.8%. The current rate is lower at 6% only.

Variable student loan interest rates

Student loans that were disbursed before the first day of July 2006 carry variable interest rates. Such rates could be converted into static one with loan consolidation. On consolidation these loans are readjusted on the first day of July every corresponding year.

Rates of interest have undergone changes with effect from 01.07.2008. Stafford loans that are in grace period have been reduced to 3.6% against the existing 6.6%. Such loans in repayment now carry interest rates of 4.21% reduced from prevailing 7.22%. Similarly the PLUS loan rates have also been reduced to 5.01% from the existing 8.02%.

For instant information you can log on to any of the numerous websites that provides such information on student loan consolidation interest rates. However it would be better to make some research about the credibility of the provider before accepting the information or advice provided.

Basics of the student loan consolidation interest

Interest rates for the Stafford loans both subsidized and unsubsidized ones fluctuate periodically though they never go beyond 8.25%. However when you consolidate your loans the weighted average of all the prevailing interest rates of your existing loans are taken in to consideration to calculate the applicable interest rate.

Till July 2008 various types of federal loans had interest rates in the range of 4.125% to 8.02% with perking loans having the minimum and PLUS loans the maximum interest rates. The ratio of the previous consolidations and existing consolidations are taken into consideration in such cases.

Consolidation during grace period could be beneficial

Though ordinarily the consolidator cannot guarantee you any specific rate or reduction before the consolidation process is over it could be better to go for such consolidation in the grace period. For example, if you have taken a student loan prior to the first day of July 2006 you might be having a variable interest rate applicable.

In such cases it could be beneficial for you to have your college loan consolidation during the grace period to have the best student loan consolidation rates. The only point to look after is that your application should reach the consolidator before the grace period is over. On receipt the consolidator will include the end date of your grace period and will complete the consolidation process on expiry of the grace period and consolidate student loans giving you a reduced rate.

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Category: student loans

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Performance is ultimately what really matters. Federal Student Loan forgiveness is an exceptional concept applicable to students only under certain circumstances. It means the loan amount received by students might be canceled in half or in full amount by Federal Government. It is not impossible and depends completely on your work performance. If you want to be one of those special students who want to be a recipient of Federal Student Loan forgiveness, then act to your best.

You just need to show your excellent performance in the following ways:

1. Organize and perform volunteer work

2. Organize and perform military services

3. Teach/preach/practice medicine in selected communities

4. Make a thorough research and meet other criteria specified by loan forgiveness programs

In case of volunteer work, loan forgiveness is conducted by Ameri Corps, where the student needs to serve for one full year, get stipends and extra amounts that can be used towards loans. In another organization, Peace Corps, volunteers can specially apply for deferment of variety of loans like Stafford, Consolidation loans and Perkins loans with partial cancellation of Perkins Loans. This dream can come true in the lives of students only if they can serve with a difference and truly devote their time in work.

Students who are in military field can also make a mark in the lives of others and at same time contribute to Federal Student Loan forgiveness scheme. Students who are in Army front are therefore highly eligible for Student Loan Repayment program. In case of teaching, Federal Student Loan forgiveness program can be conducted only if the students can become full-time teachers in elementary or secondary schools, mainly teaching students who span the low-income family groups. Under this teaching plan scheme, the students are allowed to be forgiven of Perkins Loan under The National Defense Education Act. In legal field, many law schools forgive the loans of students who dedicatedly serve in public interest or non-profitable organizations. Federal student loan forgiveness programs for medical students include several plans like NIH AIDS Research Loan Repayment Programs, NIH General Research Loan Repayment Program, Indian Health Service [HIS] Loan Repayment Program and US Force, Army and Navy Financial Assistance Program. Under each of these plans, the student should work faithfully, if they want their loan to be forgiven.

Apart from these fields, there are other ways where Federal Student loan forgiveness program becomes successful. These fields include Bachelor’s Degree in Colleges of Arts and Sciences, where student will perform the job required in institutions. Students who receive the Michael Murphy Loan specially for studying Law enforcement, probation and parole, law and penology or other significant fields related to these studies, can work off one-fifth per year to get enrolled under Federal student loan forgiveness scheme.

Therefore, Federal Student Loan Forgiveness program is applicable when the student can perform the following activities:

1. Perform full-time/partial service as a teacher in designated/recognized elementary or secondary school teaching students who belong to low-income family groups.

2. Perform the role of a teacher teaching children suffering from some kind of disabilities

3. Qualified professional teachers belonging to subjects like mathematics, science, foreign languages, bilingual education

4. Performing the role of an employee of public or non-profit child/family service agency providing services to high-risk children along with their families

Perform any of these activities as per your loan status for acquiring Federal Student loan forgiveness.

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Category: student loans

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Federal Student Loans are easier to pay and brings less long term hassle and panic if these debts are converted into Federal Student Loan Consolidation. Consolidating your loan means that all the different types of student loans you acquired will be combined in one loan. Doing so has many advantages. Since federal student loan interest rates are currently at their lowest, loan consolidation actually means that the interest rate used for the whole duration of your loan is fixed.

However, there are also disadvantages when one avails student loan consolidations. It all depends on you, really. If you think it would take you a longer time to pay off your student loan, you will then consequently pay more interest during the course of your whole loan repayment. However, since in consolidating your loans, there are really no penalties in prepayment and if you continually pay the same amount of payments before actually consolidating your loans, the interest you will incur would not increase. You will be able to pay the student loan off faster than when you did not consolidate your loans.

One category you could take into consideration regarding federal student loans is availing of the FFEL consolidation loan. This loan program helps any borrower via multiple repayment schedules. Through the FFEL loan consolidation program, only one payment is made each month. In the FFEL program, the student loan consolidation you will be acquiring will be made by a commercial lender, after which credit bureaus will tell you that you already have a zero balance in your account, after doing so you will then sign a fresh promissory note indicating that you will have a new interest rate and schedule of repayment. But, in order to avail of the FFEL student loan consolidation, you must currently be in repayment on the loan you defaulted or that you have been able to make at least three voluntary and on time monthly payments in full.

Again, refinancing student loans depends on the borrower. The United States Department of Education does not in any way allow any borrower to refinance a student loan consolidation. But if in case a borrower has an additional federal loan that is not originally included in the loan consolidation, these debts may then be added and calculated again into a another Federal Consolidation Loan. Another advantage when one avails of student loan consolidation is that there are no fees or charges incurred. The United States Department of Education does not in any way make charges or collects any fees to any borrower who avails of the student loan consolidation.

So now that the details and advantages have been outlined, the following is a basic list of some student loans that are eligible to be consolidated: PERK – Federal Perkins Loans, formerly Nations Defense/National Direct Student Loans (NDSL), PLUS – Federal PLUS (Parent) Loans, SCON – Subsidized Federal Consolidation Loans, UCON- Unsubsidized Federal Consolidation Loans, SLS – Federal Supplemental Loans for Students (formerly Auxiliary Loans to Assist Students (ALAS) and Student PLUS Loans), SS – Subsidized Federal Stafford Loans & Guaranteed Student Loans (GSL), DSS – Direct Subsidized Stafford Loans, DUS – Direct Unsubsidized Stafford Loans, DPLUS – Direct PLUS Loans, DUCON – Direct Unsubsidized Consolidation Loan, including Direct PLUS Consolidation Loans.

Student loan consolidation has another advantage. A borrower is still entitled to avail of the same Federal benefits. This is because student loan consolidation is a federal program. And being it a federal program, a borrower is more than welcome and is entitled to various benefits such as deferment, interest that is tax deductible and forbearance. Plus, the student loan is guaranteed by the government and is insured federally.

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Category: student loans

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Many people, young and young at heart have the desire to continue their education. For most of them, that means taking out student loans to pay the exorbitant costs of higher education.

The cost of higher education has risen drastically over the past few decades.

This means that often, more than one loan is needed. In most cases, students will have these debts to pay when they graduate. Often, the employment that found after graduation is entry level or low paying and the student is left with huge debts that leave them almost penniless every month.

There is hope for those who have to choose which bills to pay every month.

Federal student loan consolidation was designed to assist the graduate by lumping all of their student debt into one bill to pay each month. This makes it easier by having to write just one check each month instead of several to different companies.

There are different programs that meet the needs of almost all that apply. Each of the programs will have a different interest rate.

When you first decide to apply for federal student loan consolidation, it is important that you research the subject as much as possible.

By doing a simple Google search, you will yield millions of links to information regarding federal student loan consolidation. You will find millions of links that can assist you in making a decision.

Ask questions until you are satisfied you understand the process. Once you have signed the papers, it is a legal and binding contract that you will have a difficult time backing out of.

Do not agree to pay a certain amount each month until you are sure that you will be able to meet that obligation. Make sure that the amount of your obligation will still allow you to pay your regular monthly bills.

There are many benefits to federal student loan consolidation. You are offered a much lower interest rate to make repayment of your student loans easier. Also, when you apply for this type of loan, you do not need any co signers, and a credit check is not done. The process is usually very quick, however it is important to remember that the interest rate will be higher.

Unlike other loans, a federal student consolidation loan does not have any fees or charges to apply. They also do not charge you any penalties for early repayment. This is a welcome relief to many who already have too much to repay.

You can apply for a federal student consolidation loan with any lender that you choose. Different lenders give most student loans. However, If all of your loans happen to be through just one lender, you must apply for your federal student consolidation loan with that lender.

Federal student consolidation loans offer a way to make repayment easier for the already stressed out graduate. There are several different plans that you can discuss with your lending institution to decide which one is right for you.

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Category: student loans

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As the cost of higher studies are reaching sky level every year, students loan are like becoming a must for attaining it. However now, student loan consolidation has made this task easy for you, so you can go for it.

A federal loan consolidation is always favoured for in this type of loan you have to pay all the loans through a single loan itself.Moreover the interest rate is much lower & fixed than other loans & a longer time period for repayment is provided, so that it is easier for you to manage it. Even additional benefits and flexible repayment option are offered for making the repayment as easier as possible for you.

Nowadays the market has become so competitive that they will lower the interest rate for student debt consolidation of this kind in order to get more & more customer in competence with other economies. Thus with federal loan consolidation at your side you can easily have a healthy financial condition as the monthly repayment is fixed & is at a reachable range. It also considers you if you are having some financial problem.It also has a pact with the government & so chase away all your fears regarding getting cheated.So don’t waste a golden opportunity like this, contact the student loan consolidation companies today and go for federal loan consolidation now.

Another type of loan consolidation is private consolidation.

Private student loans are administered by standard lending institutions. They can be a huge source of funding your higher education. Nowadays at the rate of which the value for money is decreasing there is no question that seeking out financial aid to cover the fees of higher studies is becoming a challenge in new years. Now for higher studies you have to go for loans to accomplish your goal. But don’t get afraid as private student lending consolidation has come to your aid. So if you haven’t yet started hunting private student loans, you owe it to yourself to consider them.

Private student loans are also called alternative loans which are funded by financial institutions such as banks and may additionally be funded by non-profit enterprises. It was distinctly found out that this agent of funding provides financial aid support for students. These sorts of loans may well be of assistance to you to fill the shortfall and offer different assorted benefits as well.

Their main benefits are that they are always available indefinite of your credit card score or financial background. The principal benefits of private student loans are their availability and flexibility. You can get up to $40,000 per each year at a lower interest with an easy repayment at a longer time period. You also do not have to be compelled to worry with regards to filing closing dates with private student loans since you would ask for a student loan whenever the need arises. Therefore now having higher studies is not a big deal as for private student loans are easy available to you.

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Category: student loans

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If that is what it takes to improve your life, you should be proud you did it. Fortunately for all of us stuck with student loan debt there are federal student loan consolidation programs that can cut your student loan payments in half.

These programs will combine multiple loans into one loan which not only will save you money but it cuts out the hassle of multiple payment to multiple lenders.

Student Loan Consolidation Backed By Federal Government

Federal student loan consolidation is backed by the federal government and allows you to extend your repayment terms. If you have Stafford loans, you have a variable interest rate that adjusts annually. When you opt to consolidate, you get the choice to lock in at a low rate and there are many offers out there that will charge you no fees.

They want your business and you should shop around. There are many competing financial institutions that are competing for your money and that puts you in the drivers seat. You want to insist on the best possible deal on the market.

Consolidation Loans Federal Providers

Sallie Mae is a government institution that offers a ‘Best Rate Promise.’ They guarantee you that they will give you the ‘lowest official student loan rates available to you’ when you consolidate. If you have just graduated and your loans carry a variable rate you want to consolidate before your six month grace period ends.

If you consolidate your loans before the end of the six month grace period ends, many of you can lock in 6.625% or 6.75% interest rates. If you put it off until after the grace period your rate will be more like 7.125% to 7.25%.These rates vary, so check them out carefully before you buy.

Consolidated Federal Loan Downsides

Federal student loan consolidation does have a downside. When you consolidate your loans, it lowers your payment by extending the amount of time you have to pay off the loan. With federal student loan consolidation you get to choose if you want a standard repayment in which your monthly payment for the life of the loan is fixed.

If you opt for graduated repayment your payments start low and increase at intervals specified by the lender. There is also an income sensitive repayment in which your payment is determined by your income. This type of consolidation will increase as your income increases.

Watch Out For Minimum Payment Schedules

No matter what type of loan you choose the federal rules governing student loans set a minimum payment of fifty dollars. These rules are relaxed for the income sensitive repayment option. The most popular choice is the standard repayment. The payment always stays the same.

If you choose any loan beside the standard repayment, it does not mean you are locked in. You do have the option of changing your mind and applying for one of the other types of loans. The option may still be open but it depends on the terms of your loan.

You can always contact your lender for a full review of your options.

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Category: student loans

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Federal Perkins Loans are low interest government loans made through a participating school to undergraduate and graduate students with substantial financial need.

In order to qualify for a Perkins student loan, a student’s Expected Family Contribution (EFC) as determined by the government’s FAFSA (Free Application for Federal Student Aid) must demonstrate the greatest level of financial need.

Recipients of Federal Pell Grants receive priority for Perkins Loans.

Apply for Your Perkins Student Loan Early

When applying for financial aid, it’s important to note that schools distribute Perkins Loans on behalf of the government, and when the funds are gone, the funds are GONE.

This means that even if you qualify for a Perkins Loan you may not actually get one. So with interest rates steady at 5%, it’s in your best interest to submit your FAFSA on January 1 or as close to that date as possible. This will ensure that you get the maximum amount of Perkins Loan funds you are entitled to.

Perkins Amounts

The maximum amount for a Federal Perkins Loan made to an undergraduate student is $4000 per year, up to a total of $20,000 over the course of an undergraduate program.

For graduate students, the maximums are higher, at $6,000 per year and $40,000 over the course of graduate studies.

How the Government Helps You Pay Back Your Perkins Loan

The federal government subsidizes all Perkins Loans. So while you are in school, and while the loan is in any type of deferment period, the federal government picks up the tab for the interest.

This can save you thousands of dollars in interest when you eventually repay your loan. An example follows:

Say an undergraduate student is able to take the maximum Perkins Loan amount of $4,000 each year at 5% interest. The government will pay the student’s interest on the first loan for over fours years (four school years plus a six month grace period), over three years on the second loan, over two years on the third loan and over a year on the fourth loan.

This would equate to more than $2,000 in interest payments that you don’t have to make. That’s like getting an extra two thousand dollars free to pay for your schooling!

Eligibility Requirements

In addition to your EFC score, eligibility requirements for the Federal Perkins Loan are as follows. You must:

* Be a United States citizen or an eligible non-citizen with a valid social security number

* Demonstrate exceptional financial need

* Be working toward a degree or certificate in an eligible program

* Have a high school diploma, GED or pass an approved ability-to-benefit (ABT) test

* Register with the Selective Service if you’re a male between 18 and 25

* Maintain satisfactory academic progress

The Benefits of a Perkins Loan

Every year billions of dollars are awarded to students in federal student aid.

The federal government offers many different types of student loans such as Subsidized and Unsubsidized Stafford Loans, as well as the PLUS Loan to parents to help their student pay for school.

One of the most popular federal student loans is the Federal Perkins Loan, which is a low interest government loan that is offered to students who exhibit financial need.

I highly suggest a Perkins Student Loan for three main reasons:

1) You don’t need a cosigner -This is a great first loan to get on your own because you don’t need a cosigner to extend their good credit to you to get it.

2) You can have bad credit or no credit -Since you most likely have no established credit, or you may have bad credit from previous credit card charges, you are still eligible to receive a Federal Perkins Loan.

3) The government pays your interest – This is the most appealing and money-saving benefit of the Federal Perkins Loan. The federal government subsidizes all Perkins Loans, so as long as you are enrolled at least half-time in a degree program, and while the loan is in any type of deferment period, the federal government picks up the tab for the interest. You will end up saving thousands of dollars in interest once you finally start to pay back your loan.

If you’re offered a Perkins Loan, you’d be wise to take the full amount you are eligible for. With a low interest rate of 5%, a Stafford Loan, private loan or any other loan product won’t be able to compete.

Since a Perkins Loan will most likely not satisfy all of your student aid needs, you can apply for other federal student loan products, like a Subsidized Stafford Loan or an Unsubsidized Stafford Loan.

If you’re still coming up short after you’ve exhausted your federal aid resources, you should seek out a Private or Alternative Loan source.

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Category: student loans

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Nowadays universities and colleges have become really expensive. When money is just not there or short, a lot of students look to take out loans to cover the balance of living costs and school expenses, including room and board, books and school supplies, tuition and fees, as well as any transportation. This is why many college students get confused, and several of them get into some problems. You can find a lot of student loans out there created in different directions. Even a couple of them that are offered for students can be really problematic. When doing a research, signing up for federal direct student loans should be your first choice. You should only go with private loans as a last resort due to their high risks and interest rates.

Federal direct student loans are the most affordable student loans available and probably the best option for your education. They are guaranteed by the federal government and offer the lowest interest rates available. They come with some regulations and laws in order to protect the student and the organization issuing the loan. Lately, new laws have been enacted to keep and even tighter rein on these types of loans. If you consider to go with something other than federal education loans, keep in mind that you will have only small protection, and that Federal student loans offer borrowers many benefits not usually found in other loans.

Private loans generally offer less favorable conditions than the Federal loans. Going with private loans also means that your rate of interest can arise on the far side of anything you could have ever imagined. In case the economy goes down, rates of interest can go up rapidly and the sum of money you have to pay back will increase as well. It may get beyond control that you don’t have no hope of making a payment on time. It will be wise to avoid private loans if possible.

Whenever you want to get more information about federal direct student loans, you can talk to the financial aid department of your college or university. They will help you out with all of the information you may need, and they may also already offer all of the standard forms you will need. They can provide you the applications for federal direct student loans, and they can even help you to complete the forms when you become confused. No matter what type of loan application you have to complete, confusion will come up sooner or later, so be prepared for it. Getting help from some people who are familiar with the application forms is a great start.

Federal education loans do not have to be repaid until you leave school and following a grace period before you need to start returning your federal loan. In most cases the grace period will be six months after graduation before you have to start the expected refund. Even though if you don’t want to wait you can start in no time and begin to pay back directly if you prefer to do so. There are also times when money may be short you may as well be able to put refunds off at times. However have in mind that even though your refunds may be on hold for a short time, you will still be creating interest on your student loan you have to repay in the long run.

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Category: student loans

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Direct student loans are federal government loans provided through the William D. Ford Federal Direct Loan Program. These types of loans are designed to help students who have graduated from the high school and are continuing their education in colleges, universities or trade schools.

Direct student loans are part of the federal student aid programs administered by the US Department of Education. These loans are not offered through private lenders or companies. The loan agreement is between the student and the US Department of Education, without any agencies as a middle man.

Students that want to apply for direct student loans must complete a Free Application for Federal Student Aid (or FAFSA) over the internet and submit all required information and documentation. In addition each student will also have to complete a Master Promissory Note (or MPN). MPN is a legal document that explains the contract between the student and the Department of Education. It also outlines how the loan will be repaid and the specific terms and conditions of the loans.

After awarded with one of the direct student loans, you should sign up and use the Service Center. It provides you all the information of your payments and allows you to view the records on the balance you owe. If you need one, you can also obtain a counselor service from a Direct Loan Servicing site.

To be eligible for direct student loans, a student needs to attend the school that is participating in the direct loan program. Also, the student must be enrolling for at least on a part-time basis.

Types of Direct Student Loans

The two most common direct student loans are: (i) subsidized Stafford loan and (ii) unsubsidized Stafford loan. The subsidized loan has an interest subsidy and paid by the Government. Students who are awarded don’t need to worry about paying interest and hence can concentrate on his or her study in full.

Not all students will receive subsidized direct loans (Stafford loan). Only those students with very few resources and with greater financial needs are qualified for subsidized loans. Students who are dependent, or have parents that are able to help pay for their schooling are usually given the unsubsidized direct loan which doesn’t have an interest subsidy.

For graduate students who are considered independent or have families of their own to support, or no living parents to assist with educational funding can apply for PLUS loans. PLUS loans are low interest loans for graduate students and parents. These loans are under the same criteria as the Stafford loans, you’re required to complete and submit FAFSA and a MPN. Typically direct student loans have a limit on the total amount. Most students manage to get by with loans of $8,000.

Direct student loans have a fixed interest rate that is set every July 1st. There is also a loan fee that can be up to 4%. This fee is usually used to offset the cost of the programs or services.

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If the student does not already have an established credit, this may be an obstacle to the student’s further education. Bad credit student loans can help them out in such a situation. Bad credit student loans are loans which are specifically packaged for students with bad credit. These loans provide the most important financial aid to any student with bad credit or no credit at all.

Bad Credit Student Loans

If you cannot qualify for the standard student loan for any reason, bad credit student loans are the next best option. In fact, these bad credit student loans can also be used for the purpose of repairing your credit history. The easy way out would be to consolidate all your bills and pay them off with the help of a bad credit student loan.

Bad credit student loans are given out to the students at a slightly higher rate of interest compared to the interest rate on the standard student loans. If the student makes timely payments on the bad credit loan for two years consistently, then the lender lowers the interest rate on the loan.

Finding The Right Lender

There are many ways in which one can look for bad credit student loans. Parents can help out their children in this “search”. There are many private and government lending agencies that deal with such loans. And there are also many student loan management companies that exclusively deal with different kinds of student loans. Some of these companies give out loans to students without even asking for their credit score or rating. Such loans are usually short-term, like cash advance loans and student paychecks.

The latest development is the availability of the bad credit student loans online. The best part about applying for bad credit student loans online is the flexibility of the time component and the shortening of distances. A proper research work and a comparison of different loan options is required before you apply for a bad credit student loan. You just need to look for the site that provides you with the most benefits and fill up the online application form.

Online Bad Credit Student Loans

These online bad credit student loans are usually short-term loans that do not require any credit checks. A cash advance for about $500 can be availed overnight through the Internet. The repayment procedure for these loans is also very simple. A student needs to send a post-dated check to the lender after the approval of the loan application. This check is cashed when the student gets the next paycheck.

Filling out the application form is a simple process. The information required in the forms for bad credit student loans is very basic: your address, some other personal details, and at times, your credit ratings. If you are applying for the first time, you can hire an agent. Professional help can come in handy at the time of application for student loans. This will enable you to get all the information that you require about different loan options. There are also many schools and colleges that provide consultancy and help with regards to the different student loans and financial products.