Student Loans : News, Updates and Blog Posts

Can you believe it’s nearly September already? I sure can’t. With classes around the corner, this is one of the most vital times of year to get your finances in order and make sure your tuition & educational costs are covered for Fall semester and beyond.

If you’ve been waiting to apply for a private student loan, be advised that they can take up to 45 days for processing. Like any other bank product, sometimes they need more paperwork or the school certification process can be delayed which slows the entire process down. (more…)

The key component of being approved for a low-interest private student loan is the credit score and history of you and/or your co-signer. Depending on what your score looks like to a lender, you could see a variance of anywhere from 1 to 10% on the interest rate of your approved student loan.

Aside from checking your ability to get a loan, knowing your credit is important for a ton of other things in life such as buying a car, getting an apartment and, of course, getting a credit card. If you’re just starting out and need to build your credit, check out StudentPlatinum’s page on student credit cards.

Otherwise, do yourself a favor and check your credit ahead of time; it will save you a lot of time and frustration to have the right expectations set based on your personal financial profile.

Hey, fellow college kids! It’s the time of year again for school to start. Are you wondering how you’ll be able to pay for it? Don’t let a school’s price tag or lack of financial aid scare you away. Be sure to look into getting a private student loan.

Private student loans are offered by a wide variety of companies, and allow users to borrow up to the full cost of their education.  Besides your actual school tuition, you can also use a private student loan for textbooks, housing, meals, and any other school-related fees. Unlike federal loans, interest rates for private student loans vary, and there are absolutely no deadlines. While scholarship applications and FAFSA enforce deadlines, you can apply for a private student loan at any time.

To qualify for a private student loan, you need to be a United States citizen or permanent resident applying alongside a co-signer with good credit history, and be enrolled in school at least half time.  Find out what your options are now!

With all the financial aid choices out in the wild, sometimes it isn’t clear why one solution is better than another. For instance, consider the ongoing debate between federal PLUS loans and private student loans:

• They both are credit-based
• They both can cover up to 100% of your cost of attendance
• They both can be used for non-tuition costs such as living expenses, books and computers. (more…)

On Tuesday, one of our financial aid forum users, Scarab790, asked this question:

I am starting grad school next week and my cost of attendance is $74,347 with a grant of $10,000. With no personal funds to reduce the cost, I have the option of taking a federal grad stafford loan, grad plus loan or a private loan. which of the loans is better to take? the fed loans or private? If a federal one, I will have to take both grad stafford and grad plus loans to make up my bill.I want to reduce my debt burden by all means possible. What do you advise?

This is actually a very common question and the answer is by no means etched in stone.

Let’s outline some of the major details of each type of loan:

Graduate PLUS Loan

• Fixed interest rate of 7.9% APR
• Several generous repayment plans
• 0.25% APR reduction for enrolling in auto-debit payments

Private Student Loan

• Variable interest rate, based on an index such as LIBOR
• Fewer repayment plans
• A wide variety of benefits depending on the lender, ability to use a co-signer

The easy response to the question is the federal loans are a better deal. However, this may not be the case with all students. One important thing to consider is the credit aspect; if you have a good score, excellent history or creditworthy co-signer, you can potentially get a very low APR private student loan.

In addition, there are numerous benefits offered by private lenders. Some select examples are APR reductions, graduation rewards and co-signer release. Compare private student loans »

Thus, the decision rests more on the basis of credit. If yours is low, non-existent or troubled, always pick the federal option because it is far more lenient and there are repayment plans that take your income into account.

If your credit is good, or you have a good co-signer, pick a private student loan. I have seen rates as low as 2.80% APR with private loans; startlingly less than a Graduate PLUS’s 7.9% APR. Just keep in mind that private student loans have variable interest rates, so they can fluctuate during repayment.

If there’s one thing that makes people nervous about borrowing money, it’s the question of the interest rate. Will it go up? Is fixed or variable better? What the heck is LIBOR?! All these questions will be answered, friend… so read on! (more…)

A lot of the blogs on Student Loan Network focus on how to get a loan or the benefits of each. Today, I’d like to take a different perspective and provide some helpful information for students who already have them; specifically, what you can do to minimize your student loan debt and take full advantage of your loan benefits.

1. Keep an eye on rewards and incentives.

Did you know that the vast majority of private lenders offer repayment incentives such as interest rate reductions? In many cases, these reductions come from automating payments through a checking or savings account (ACH). 0.25% is the common amount. (more…)

If you have primarily been looking to receive financial aid through federal loans and scholarships, you have no doubt been exposed to deadlines. Well, with a private student loan, there are no deadlines.

The biggest advantage of a private student loan is its flexibility.You can take out up to the total cost of your education (tuition, housing, fees, books) or you can just take out a few bucks for a new laptop or textbook.

All you have to do to qualify for a private student loan is be a U.S. citizen or permanent resident with a credit worthy co-signer. You must also be enrolled at least half time or greater as defined by the school (typically 6 credits). Check out your loan options today!

If you are applying for a private student loan, you might wonder how lenders arrive at the interest rates they charge on your loan.

Contrary to popular belief, lenders don’t just pull a number out of thin air. In fact, they use one of two financial indexes to determine the interest rate that is then extended to borrowers. The two rates are the Prime Rate and the LIBOR Index.

Prime Rate

The prime rate, which is currently 3.25%, is based on the fed funds rate, the interest rate at which a depository institution lends immediately available funds to another depository institution overnight.

While some lenders have their own version of the Prime Rate, the industry standard is widely considered to be the Wall Street Journal Prime Rate, which is based on the fed funds rate and the average prime rates of the top banks in America. The prime rate tends to change as a result of Federal Reserve monetary policy meetings. These meetings occur about every 6 weeks, or 8 times a year.The fed funds rate is

LIBOR Index

LIBOR stands for London Inter-Bank Offer Rate.  It is the interest rate that banks charge each other for loans  and is based on the average interest rate paid on deposits of U.S. dollars in the London market. The rate is set by the British Bankers Association and released daily.

Unfortunately, you may not choose which index you want your lender to use. Be sure when browsing for private student loans that you seek out which index the lender uses. It is fairly common for an interest rate to fluctuate depending on the index implemented.

Compare Private Student Loans

Many students from around the world flock to the U.S. to earn a college degree. Likewise many American students choose to study abroad for a semester. Both groups are likely to wonder how they can pay to study overseas. Here are some of the financial aid options that are available.

International Students

Private Loans – A student who is not a U.S. citizen but wishes to get a degree in the states is eligible to receive a private student loan to cover tuition and other costs of attendance, such as housing and books.

To receive the loan, an international student must have a U.S. citizen cosign the loan. International private student loans carry many of the same benefits as those designated to American students, including flexible repayment terms and a .25% interest rate reduction for direct withdrawal of payments. Compare and apply for a private student loan today.

Federal Loans – Unfortunately, international students who attend college in the Untied States are not eligible for any federal direct loans including Stafford loans, PLUS loans and Perkins loans

U.S. Student Studying Abroad

Federal Loans – U.S. students studying abroad or who are enrolled in an approved school overseas can use federal student funding to cover tuition and other costs of education. They may receive federal aid the same way they would if they were studying in the U.S., by filling out the  the Free Application for Federal Student Aid (FAFSA).

Private Loans - U.S. students may also apply for a private student loan to study abroad. Depending on their credit, they are subject to varying interest rates and may require a cosigner. Compare and apply for a private student loan today.

Both groups are of course eligible for scholarships. Scholarships are the best form of financial aid because they do not need to be paid back and do not charge any interest. For more information about international scholarships, visit www.StudentScholarshipSearch.com.