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).
What is a FICO score?
August 19, 2008
FICO comes from the Fair Isaac Company, which came up with the process of condensing all of your credit information into one three-digit number.
Three major credit bureaus hold your FICO score; Equifax, TransUnion, and Experian, and each calculate it a little different than the others. Should you wish to dispute a mark on your credit report from one of the three bureaus you can write to them like I have done previously (see below for address information).
Equifax Information Services
P O BOX 740256
Atlanta, GA 30374
800-997-2493
TransUnion
Customer Disclosure Center
Trans Union Consumer Relations
PO Box 2000
Chester, PA 19022-2000
800-888-4213
Experian
NCAC
PO Box 9556
Allen TX 75013
888-397-3742
Your FICO score is used in determining your interest rate, and is even used as a barometer for getting a job. FICO scores range between 300 and 850. Ratings are as follows:
Excellent: Over 750
Very Good: 720 or more
Acceptable: 660 to 720
Uncertain: 620 to 660
Risky: less than 620
The formula used to calculate your FICO score includes information based on several factors:
~ 35% on your payment history
~ 30% on the amount you currently owe lenders
~ 15% on the length of your credit history
~ 10% on the number of new credit accounts you’ve opened or applied for (fewer is better)
~ 10% on the mix of credit accounts you have (mortgages, credit cards, installment loans, etc.)
Now that you know what your FICO score is and how it is calculated you’ll want to work on getting it as high as possible. I’ll be offering some tips in the coming weeks!
For more information about credit or to apply for a credit card (click here).
Private Loan Consolidation
August 14, 2008
Consolidation is a great debt management tool. It allows you more time to repay your loan(s). You can generally extend your loan terms out to 25 or 30 years from the initial 10-year marker, which means you can dramatically lower your monthly payment.
Another good thing these days are the lower interest rates. When the economy is slumping interest rates tend to get cut. As a byproduct of these rate cuts (lower interest rates) you the consumer benefit, which is why it’s a great time to consolidate your private student loans.
With one convenient low payment, no prepayment penalties, and lower interest rates it is the perfect time to consolidate.
If you are seeking private loan consolidation (click here).
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