Does Consolidation hurt my credit?
November 14, 2008
NO. How bout that? You just read the world’s shortest blog. I may be a man of few words, actually just one word, but my words are even more powerful than the semi-popular teenage alien superhero duo of Zan & Jayna. That’s right, the Wonder Twins! Actually, by boasting about my one word blog I have now far exceeded that loneliest number, darn!
Consolidation is merely shifting your loans from piles A, B, and C and condensing them into pile D. That doesn’t hurt your credit at all, in fact in many cases it helps because your monthly payment is a lot lower after consolidation and your credit report will reflects a Paid status next to each loan involved in the consolidation which adds points to your FICO score.
Now if you were to do a debt settlement where a third party was involved in negotiating your amount of debt down, than that could impact your credit negatively. Instead of a Paid status it would carry a Settled or Settled for Less than Full Balance status.
Student Loan Debt Grows
October 28, 2008
I became a father for the first time earlier this year which was the best moment of my life. Every decision I
now make is with Barrett in mind, which includes going back to school. I’m currently enrolled in classes with the aim of bettering myself, providing a better life for my family, and becoming a more well rounded person. I want to add to our countries GDP numbers. The only problem is my loan volume from school is now skyrocketing upward like a five star Sarah Palin wardrobe.
Did you know the average college graduate carries more than $20,000 in debt? That is a 6% increase year over year. When you combine that with starting salaries for recent grads, which only rose by 3% over that same time period according to the Project on Student Debt, it’s even harder for students to repay those sizeable loans. Of course many students have been unable to land jobs at all and have been forced to place their loans into forbearance where more interest will accrue inflating that total payback number.
It’s really an interesting dichotomy. Go to school and be in debt thousands vs. entering the work force right away with no debt at all. They both have pros and cons but the long term benefits and typical salaries for those with an education will far surpass those without – even when debiting the loan cost from the bottom-line.
To help make those monthly payments more affordable you may want to consider consolidation. Consolidation extends out your loan term and helps minimize your monthly student loan expense. There are also no prepayment penalties so if you have extra money to put toward your loan you can do so at any time.
I know consolidation is going to be in my near future when I graduate. That way I’ll be able to afford my loan payment each month and still buy that new bike for Barrett!
Economic Hardship Deferment
October 3, 2008
“I can’t pay my bills, help!” I hear that unwanted phrase at least 10 times a day, and many others who don’t actually say it are thinking it. I can hear it in their voice.
For those in trouble, and I know there are many as the unemployment rate is holding steady at 6.1%, you have an option for your private loans. You can defer your loans after you consolidate for up to 12 months with an economic hardship deferment?
To qualify for an economic hardship deferment your student loan payment must exceed 20% of your gross monthly income, and your gross monthly income can not be more than 3X the Federal Poverty level in your state.
Also, as a back-up plan, anyone can qualify for a 12 months forbearance on their private loan consolidation just by requesting it. You don’t have to “qualify” financially for this.
If you have $10,000 or greater in private student loans and wish to consolidate (click here) now.
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Consolidation Does Not Require Multiple Loans
September 23, 2008
Here is my consolidation question of the day!
Question: I only have one private loan so I can’t consolidate, right?
Answer: WRONG! Loan consolidation is viewed as a debt management tool. The purpose is to extend your loan terms to help minimize your monthly payment. Regardless of whether you have one loan or ten you may apply for consolidation.
I guess when you are in the industry you never give this a second thought - it’s just common knowledge that you don’t need more than one loan to consolidate, but many don’t know that.
If you have $10,000 or greater in private student loans and are looking to consolidate (click here).
To consolidate or not to consolidate my private loans - that is the question.
September 5, 2008
I have spoke to many students who are under the belief that consolidation is a means by which to lower your interest rate, however that is not the case. The real benefit to consolidating is extending your loan terms and minimizing your monthly payment. Granted, your rate may decrease as some lenders use the LIBOR index while others base your interest rate off the prime, but that is no guarantee.
So is consolidation right for you? Each person’s financial situation is different so it’s not a black or white answer. What I can tell you is this, if you are struggling with your monthly payment than consolidation will probably serve you well.
We’ve actually seen a spike in consolidation applications over the past month which is reflection on the current state of the economy. Many don’t have jobs or are only working part-time right now and need to lower their monthly payment. The job market is the worst it’s been in years. According to the Labor Department the unemployment rate just jumped to 6.1% the highest in 5 years. Over 600,000 jobs have been lost so far in 2008! I guess we should just be thankful we are in a recession and not a depression.
If you would like to find out what your interest rate and payment terms would be without obligation you may (click here).
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