Student Loan | Student Loan Advice 3 Reasons Student Loans Are

February 2, 2012 – 3:45 am

In this article we’ll discuss three reasons why student loans aren’t close to being bad debt and how they can even be considered good debt to have.

1. Interest is tax-deductible

On federal school loans you can claim interest you pay as tax deductions. Very few types of loans or debt allow you to do this and it can save you hundreds, if not thousands, of dollars over the life of your loan. credit card debt will not allow this and neither will car loans. You can usually claim interest on your mortgage,but that’s about it. Pretty much all other debt will not get you any deductions on interest.

2. Low interest rates on consolidated loans

Granted, it’s still debt. And yes, you do have to pay it off. But compared to credit cards at 20-25% interest your 6% Student Loans are an absolute bargain. Especially when you consider them what they really are: an investment in your future. If you are stuck owing both, pay the minimum on your student loans and close out the credit card debt as soon as possible.

3. Federal loans offer repayment flexibility

If you have an unplanned event occur (such as a job loss) and cannot pay your student loans, most lenders offer deferment plans that will stall your repayment for 6 months or a year. This will allow you to correct your financial situation and get things under control without defaulting on your loans. Student loan lenders understand things happen and they are usually more than willing to work with you. Try getting that kind of compassion from your credit card company.

As good as those three reasons are, your monthly student loan payment would still be better off in your personal retirement fund, so pay them quickly, just not at the expense of paying off other, high interest debt.

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Tags: educational loan consolidation, government loan consolidation, student loan advice

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Federal Student Loans| Top Ten Reasons For Consolidating Your

2012/01/20 – 02:03:28

1. Lock in a low interest rate.
By consolidating your Federal student loans before June 30th of this year, you can take advantage of the current low interest rate of 4.7 percent. As well, you will secure this interest rate for the life of the loan, so you won’t have to worry about a rate increase.

2. Peace of mind.
Have you had sleepless nights worrying about whether or not you can afford to pay your bills? By consolidating your student loans, you can save up to 60% on monthly payments.

3. Improve your credit score.
When you consolidate, the new lender will pay off your existing student loans. This process of loan payment, along with reducing the number of outstanding loans will improve your credit score. And, don’t worry if you don’t currently have stellar credit. Because your loans are guaranteed by the U.S. government, your credit score won’t be checked as part of the application process.

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4. Streamline your payments.
Have you racked up multiple loans with varying amounts over the course of your time in school? It can be confusing to keep track of all of the bills. When you consolidate, you will simplify your life by only having to pay one amount to one lender.

5. Auto-pay.
To further simplify your bill paying, sign up for auto-pay at the time of the consolidation, and you can save yourself the cost of a stamp and the time it takes to write a check. The lender will simply deduct the amount from your bank account on a regular schedule. Most lenders provide a discount for borrowers who sign up for auto-pay.

6. "On Time" payment discount.
Like auto-pay, lenders reward borrowers with an interest rate discount for paying on time for a certain period (usually 36 months). Make sure to ask your lender about discounts when you apply for a loan consolidation.

7. Forbear or defer.
Once you have consolidated, you will retain these Federal borrowing privileges.

8. Help your parents.
Did your parents borrow money to help pay for your education? They, too, can consolidate their PLUS loans and lock in the current interest rate.

9. Get out of default status.
You can stop the harassing phone calls or wage garnishments by consolidating loans that are in default and get back on track with your financial status.

10. Financial Savvy.
Maybe you weren’t a straight "A" student, but everyone will think that you’re a financial genius when you tell them what you are saving on your new consolidated loan.

Tags: federal student loan consolidation, student loan consolidation, student loan debt consolidation

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