Student Loan wise way ...

What You Need to Know Before Getting a Student Loan (advise from the expert)

The student loan process is not one that you can randomly enter into one Saturday afternoon. It is a process that requires your hard work and dedication. This is your college financing, therefore you need to make sure that everything goes just like you want it to. That is why you should take a look at the following information. There some things that you must know before you go and get a student loan. Please, look out for yourself at this time. You are the one who is receiving the education, and you are the one who will need to pay the money back. This is why you should get adequate information before advancing.

What You Want vs. What You Can Afford

Many people enter into student loans with the idea that they will try to get as much money as they possibly can. Well, this is not a bad decision if you can afford it. There are two things that factor into a decision. The first is how much money you need for the education, and then second is how much you can afford to pay back. Getting as much as you possibly can should come in third. You do not want to be stuck with a high student loan bill when it is all said and done, because that will begin to have the reverse effect. Do not let your eyes get bigger than your brain at this time. Some people see “free” money in front of them and forget that it will have to be returned, plus an interest rate.

The Benefit of Federal Student Loans

You have a choice to make with student loans. Do you want to try private student loans, or federal student loans. Yes, it is true that dealing with the government is a tough, and sometime frustrating process; especially when it comes to getting money. Those who qualify for these loans, however, will always have federal help, whereas private student loans could have a whole different set of criteria. Federal student loans generally have a better rate of interest attached to them. Remember, this is your decision so make sure you are happy with it. If you find a better private student loan, take it! You just need to weigh both opportunities. Your financing chances are what you make of them.

What Should You Expect From These Loans?

Some people go into this process and expect that student loans will completely change their lives. Well, yes, it will help you get an education, but you must know what to expect. You should expect to get the right amount of money for your college tuition. You should expect that your student loan does not hinder your chance at a fair education. Finally, you should expect to do research and come away with the best repayment options possible for your post-college life. These are the best things for you to expect, and anything more is a bonus. If you want too much from the beginning, then you might be disappointed and believe that the process was a failure. Take your time and get this right.

What to know about consolidating student loans

Just yesterday, they were applying to college. And now they've graduated. Along with gaining a new degree, many graduates will also leave campus with new student loan payments they'll have to fit into their post-graduate budgets. Consolidation provides grads with the ability to combine their student loans into one megaloan, but it comes with drawbacks. Here's what you need to know before deciding to consolidate student loans.

How it works

Loan consolidation is when a borrower takes out a new loan to pay off several smaller student loans. Instead of making multiple payments to multiple lenders, the borrower only has to pay off the new consolidation loan, says Michelle Pezzulli, vice president of operations for Credit Union Student Choice, a student lending service provider in Washington, D.C.

"That new loan will have its own interest rate; it will have its own repayment terms; it will have its own terms and conditions," she says. This can be attractive to borrowers because the consolidation frequently results in longer repayment periods and lower monthly payments.

Consolidating federal student loans

When it comes to consolidation, the types of loans you have matters, but most federal loans, including Stafford, Perkins, Direct Plus and Supplemental loans, can be consolidated with other federal student loans.

"The interest rate on (federal) consolidation loans is an average of the interest rates on the (federal) loans you're consolidating," says Ken O'Connor, director of student advocacy for Fynanz, a New York City firm providing technology for the private student loan market. Even if your rates seem high, t he Department of Education puts a cap on consolidation loan rates at 8.25 percent.


One major advantage of federal consolidation loans is that borrowers don't need a stellar credit score to qualify, they can apply any time (even if their loan is in default) at LoanConsolidation.ed.gov, and they'll always get a fixed interest rate. Regardless of how the market fluctuates, borrowers will never pay more than 8.25 percent on their consolidation loans.

Private consolidation

Private loans can typically only be consolidated with other private loans. And once consolidated, they usually have variable interest rates, O'Connor says. So when you apply counts. Consolidating private student loans when interest rates are low (like now) "could potentially save thousands of dollars." It also means your interest rate can fluctuate higher as the years tick by.

Unlike federal loans, it can be trickier to get your private loans consolidated. Private lenders require borrowers to pass a credit check to get the best rates. That means if your score isn't superhigh, you could wind up paying more if you consolidate. It also means if you're a new grad with little credit history, you might need a co-signer to be eligible. If a co-signer is necessary, O'Connor says borrowers should ask if there's a co-signer release option after a certain period of time.

"With (our student loan program), if the borrower makes 12 months of on-time principal and interest payments, they can request to release the co-signer," he says. "That creates tremendous flexibility, especially for families applying for loans for multiple kids."

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