Credit crunch closes doors for students

With students around South Africa beginning tertiary study in February the global credit crunch looks set to make accessing a student loan a tough task.
The economic climate has seen banks tighten up on lending and two major banks, FNB and Standard Bank, have confirmed that their approval rates for student loans are down year-on-year.
This is despite an increase in the number of matriculants from the class of 2008 who qualified for entrance to tertiary education.

'Bad debts have increased due to higher expenses and lower incomes'

According to reports, 107 000 candidates achieved matric exemption in 2008 compared to 85 000 in 2007.
Francois Naude, FNB national product manager of student loans, said the bank was "tightening up" as bad debts had increased due to higher expenses and lower disposable income levels over the previous 12 months.

Read full article on IOL.

What To Look For When Searching For A Student Loan Consolidation Company

With so many companies looking to acquire the business of students who are looking to consolidate all of their student loans, it?s easy to be taken in by some of the unscrupulous companies in the market. You don?t want to just take the word of the person who is representing the company because of course; he or she is only going to give you the positive information. You have to know what information is probably correct and what information is just a sales pitch to get your business.

When you look for a company who is willing to consolidate student loans into one payment, you want to find one who is willing to work with you on a payment plan that meets your needs. You want to find someone who can offer you a plan with lower payments at an attractive interest rate. In order to do this, it will be necessary to investigate both the possibility of a private student loan consolidation as well as a government student loan consolidation loan. Of course, your current situation may only quality you for the government student loan consolidation. Things such as unverifiable income or bad credit may prevent you from obtaining private financing, but the federal programs require no income verification or history of good credit.

To be assured that you are dealing with a company that has good credentials, unless the debt consolidation company happens to be a lending institution with whom you are familiar with, always check them out through the Better Business Bureau. The main thing you need to know is if there are any complaints against the company, what they were, and the outcome of the complaints. You want to be sure the company you are considering is not simply a debt management company looking to attempt to con you into a settlement on your loans, and thus, ruining your credit.

When searching for a company with whom to work, you want to be certain that the company is not a ?loan shark? outfit that is going to charge you an exorbitant amount of interest to consolidate your loans. When you research the companies, keep in mind that federal consolidation loan average 1.5% to 4.5%, and you don?t need a job or credit to qualify. Even private student consolidation loans are usually under 9%, so if you are to speak with someone who charges more than that and is not able to give you a term that averages ten to twenty years, you need to look for another company.

The research is an important aspect of finding the right company for consolidating the student loans. You need to be sure that the company you choose is doing everything possible to meet your needs and that the plan you choose is going to help you pay off the student loans and not just get you deeper into debt because of a high payment or interest rate. Make sure you have done all the research and know what you can and cannot do, so that you can write the deal you want based on your research. By knowing beforehand the options that you have, you can make sure that the company you choose will give you the best deal that is possible based on your needs.

Darnell is a writer for several websites. For more information on student loan consolidation visit our debt consolidation blog.

What is a Federal Student Loan and When Would You Need it?

If you are a student in college or are planning on heading to college, a federal student loan is something that you are definitely going to want to learn more about. A federal student loan may be just what you need to further your education if you are not able to afford it on your own, and here is some important information that you will need to be aware of.

What it is

A federal student loan is different from other types of loans out there. With a federal student loan, you will really be making the right first step on the path to financing your higher education. These loans are recognized as being the most affordable loans available to students, which is why they are so popular among the younger generation.

They come with the lowest interest rates which is something that all students can appreciate, and as well they have deferred principal and interest payments until after graduation. This way the students are able to focus solely on their studies until they are out of school, at which time they can begin focusing on the repayment of their loan.

Repayment

It is very important that you make each federal student loan repayment on time. This way you will not default on the loan, and as a result you will keep your credit in good standing and will be able to get another loan later on in life if you have to.

One of the biggest mistakes that students make is that because they do not have to worry about paying back their loans the entire time they are in college, they don't think about it once they are finished, and end up making late payments, even their very first payment. To avoid this, it is necessary that you mark down the date that you are expected to start paying back your loan, or at least make a hard mental note of it, so that you do not forget.

It is important to make all payments on time if you want to keep your credit in good standing and ensure that you are able to get a loan later on in life as well if you want one, as many people do, for a house or other purposes.

As you can see, a federal student loan is a great option that you have available to you, one that you may just want to take advantage of.

Loan Limitations Worry Int’l Business Students

February 6, 2009 - 1:00am
By Byungkwan Park

International students at The Johnson Graduate School of Management are still scrambling to find student loans in the wake of the announcement last fall that companies like CitiAssist and Sallie Mae would terminate their “no-cosigner” student loan programs as a result of the financial crisis.

While this specific loan crisis is generally not a concern for U.S. students due to the availability of federal loans, international students heavily rely on such loans, which do not require them to find a cosigner within the U.S., to finance their education.

“It’s just the international students [who are affected]. Our domestic students will be fine; they’ll be able to get federal loans,” said Lisa Pastrick, financial aid counselor at The Johnson School.

For the past two years, international students made up nearly a quarter of the Johnson School’s MBA program. Of the 272 enrolled MBA students in the class of 2010, 73 percent are U.S. citizens.

As of now, the Johnson School does not have a definitive solution to the problem. Its website states “the only U.S. loan option available to international students is with a credit-worthy U.S. citizen co-signer or U.S. permanent resident co-signer.” However, the school reassures its students that it is “currently investigating loan options for international students without a U.S. co-signer and will provide information as it evolves.”

Approximately 10 to 15 percent of current international students at The Johnson School have depended on the “no-cosigner” student loans. Tuition at the Johnson School for the 2008-2009 academic year costs $44,950 — an amount which many international students may have difficulty paying without a loan.

“We’re working with several multinational banks and financial institutions to secure a ‘no-cosigner’ loan program,” said Randall Sawyer, direction of admissions and financial aid at the Johnson School.

The Johnson School is specifically bargaining with three banks. According to Sawyer, contracts have nearly been secured for two of these banks and the third one is pending.

“I can say with a very high degree of confidence that we’ll have a ‘no-cosigner’ loan program in the very near future,” he added.

Nevertheless, the number of international students who applied to the two-year MBA program at the Johnson School for the class of 2011 dropped by 20 percent. To encourage accepted international students to enroll, The Johnson School is offering regular scholarships to international students for the first time.

The Johnson School is not the only business school struggling to find a solution to the loan crisis, according to BusinessWeek. Leading business schools that used to offer the CitiAssist loan program, such as the Harvard Business School and the Wharton School at the University of Pennsylvania, are trying to facilitate new programs to help their international students. One school that has found a replacement lender is the Sloan School of Management at the Massachusetts Institute of Technology.

Prabhushankar Rajamani ’10 is one of many two-year international MBA students at the Johnson School affected by the loan crisis. Rajamani, a graduate of PSG College of Technology in India, was attracted to The Johnson School’s immersion program, strong finance program and small, collaborative student community.

Rajamani had been financing his MBA education at Cornell with the CitiAssist loan but now has been placed in a difficult position with the program’s termination.

“I’m using the ‘no-cosigner’ option for the first year, and my second year financing is still unclear. The financial crisis is affecting us in more than one way –– fewer jobs, increased costs and no international student loans,” he stated in an e-mail.

News via Cornell Sun.

Why You Should Consolidate Your Student Loans

by Dennis Powell

Student Loan consolidation programs offer former students and recent graduates a convenient and low stress way to manage their education financing. Most people set up their consolidations after they finish school and while their loans are still in the grace period. Consolidation is often the best way for students to reduce the number of payments they write each month while locking in a favorable interest rate.

Student Loan Consolidation is a great way to simplify payment options. The typical student leaves school with loans from a variety of sources. By using a single consolidation loan, you can reduce the stress of keeping track of different monthly payments and payoff schedules by rolling all of your loans into a single package.

Lower your Interest Rates with Student Loan Consolidation. Often times, consolidating student loans into one big loan allow the borrower to get a fixed interest rate as well. Fixed interest rates provide borrowers with some measure of security while providing a way for borrowers to plan a workable monthly budget without the fear of sunned interest rate changes throwing their payment schedule off course. Many student loan interest charges are also tax deductible; having one single loan makes tax planning easier as well.

Lower monthly payments are also possible with a student consolidation loan. By reducing the number of lenders you are working with the borrower can often get a single payment that is lower than the sum of all of their other payments. Sometimes you can reduce this number even more by selecting the automatic payment option which will automatically make payments each month out of the bank account you designate.

Consolidation loans often offer extended payment terms for borrowers. Extended payment terms are another tool to reduce monthly payments. This is a great benefit for recent grads who tend to have lower pay at the beginning of their careers. As the borrowers career moves forwards they can often refinance the loan later, or make additional payments to pay the loan off early.

Student loan consolidation can provide recent grads the tools they need to make a solid transition into life once they have completed their formal education. Reduced monthly payments, fixed interest rates, and extended payment plans, help the entry level worker stay current on their obligations while simplified record keeping allows them to focus on their new careers instead of how to repay their loans. Student loan consolidation programs help former students start their new life on the track to success.

About the Author:

Dennis Powell frequently write about student loan debt consolidation and the consolidation of federal loans for private students.

Could you consolidate your student loans if your loan amount is under $10,000?

I'm thinking about attending grad school in the fall of 2006. I am currently repaying my undergrad student loans in which amount to only about $8000. Would it be wise for me to consolidate my loans now? What company can I use since my loan amount is under $10,000? How would I be affected by consolidating my loans before beginning grad school?
Consolidate Student Loans Under $10,000

If you have a federal student loan then you can consolidate your loan starting from $7,500.

You can use http://www.scholarpoint.com to consolidate your loan. There are calculators to tell you how much you're paying each month before you consolidate your loan. However if you're studying again don't you need to get another loan?

Visit http://www.consolidatestudentloanscritic.com for a quick introduction to how loan consolidation works. Well if you're getting another loan then before you consolidate get, a new federal loan and then consolidate both loans.

This is the best way to go. Because $8,000 is not a lot to consolidate so if you need the money you might as well borrow more.

However if you consolidate your current loan of $8,000 there is a way to re-consolidate your loan again. Here's a brief outline.

1. Get a new federal loan for let's say $10,000 at 6.5%.
2. Then, talk with your current loan consolidator and tell them you want to combine a new loan with your current consolidated loan. Some lenders will allow you to do this but before you consolidate ask them first!

Hope this helps and good luck with your new grad course!

7 Compelling Reasons to Get Federal Student Loan Consolidation

Fast Track to Student Loan Consolidation

Consolidation isn’t a foreign word and it’s not too big of a word to understand. Consolidation is easy. It combines all of a student’s loans into one payment. It’s that simple. It’s easy as pie and will let you breathe easier too. Student loan consolidation is convenient and allows you to combine all your loans. In addition, consolidation is no longer only geared toward federal loans. Now students also can consolidate their private loans.

Student loan consolidation
Tired from paying interest on student loans every month, afraid of the deadline of paying back loans, there is a solution of your tensions, STUDENT LOAN Consolidation. In student loan consolidation, a student may enjoy many benefits; some of them are following below.

1.lower monthly payments
2.only one monthly payment rather than paying separately
3.Student loan consolidation rates are very low, fixed interest rate cannot exceed 8.25% at any time, coupled with national interest rates at a 40-year low.
4.For the application of student loan consolidation, you don’t have to offer any credit card check or processing fees.
5.the terms and payment plans of student loan consolidation are very flexible, the provider can mode them according to your financial needs
6.While you don’t need to consolidate in order to take advantage of this one, you can knock an additional .25% off your rate by making your monthly payment electronically. This electronic debit option does more than save you money - it decreases your chances of forgetting a payment.
7.The option to prepay your loan at any time without incurring a penalty
Sometimes a student got confused about the qualification of applying for student loan consolidation. But now government clears that students who are still in their grace period or cannot re pay their owe money on a student loans can qualify to get student loan consolidation or those who are still in school may consolidate their government-guaranteed loans

Now Is the Right Time to Consolidate Student Loans

Students graduate from college with that prize possession: the much-anticipated college degree. Then there are those students who graduate college with that added bonus: a stack of student loans. While searching for the ultimate job, the last thing a student needs is worrying about how to pay off a ton of student loans.

Today in the market, there are many companies offering student loans to the college students, but when it comes to their interest rates, they are charging very high. A student has to pay interest on their loans, every month, which is quite impossible for some due to lack of money and time. When it comes time to pay back their student loans, it can be a real burden and a distraction from their career. For those, student loan consolidation is a best deal and step to follow. In this, you don’t even get low interest rates, but can enjoy other facilities including grace period of six to nine months, only one monthly payments, tension-free mind etc.

Due to existence of government sector, a student has an opportunity to enjoy the offers given by the government as they are quite competitive than private. Student loan consolidation rates is fixed and cant be changed after signing the contracts and whenever student has graduated or ceased to be a full time student, he can also enjoy the benefit of grace period of six to nine months which allows him to get employed and repay their loans easily.

With federal student loan consolidation, rates are fixed. Students also can take advantage of deferment, forbearance and cancellation options.

Another highlight of student loan consolidation is the extension of payments. Many students find they can extend a 10-year repayment plan to as long as 30 years. This depends on a borrower’s balance, so it’s important to check out the options. Student loan consolidation offers students the same interest rate on the same amount, but for a longer term, hence better affordability.

Shana Shane
http://www.articlesbase.com/finance-articles/7-compelling-reasons-to-get-federal-student-loan-consolidation-62684.html

Student Debt Consolidation Loan – Tension Free Student Life

Michael Moore asked:
Student life is once, so we must enjoy it. But the tension of paying off the different student loans can be frustrating at times. Besides procrastination is also a natural part of student’s college life. This does not harm your results but not paying loans at time will definitely affect your financial future. The best option for a student to keep his financial worries away and enjoy maximum of college life is student debt consolidation loan. Such a loan consolidates all your loans into a single one which is easy to manage.

Read the rest of this article about Student Consolidation Loan here.

Student Loan Consolidation Info - Raise Your Credit Score With A Consolidation Loan

Ian Wilkie asked:

A student loan consolidation can help you save money and reduce the amount of long term debt load you carry while raising your credit score at the same time. Improving your credit score over time can help you considerably as you start out in the real world and will have the need to purchase a new car, or get an apartment or maybe buy a house, and also be able to have a charge card. Lives are built on having good credit to borrow the money you need when you have started your career and have the means to make monthly payments to finance your dreams. If you are in debt with multiple student loans, take the time to investigate the benefits of getting a student consolidation loan to help you start making just one payment each month and give your credit the boost it needs by sticking to your loan consolidation payment schedule.

Read some other tips to boost your credit score on Student Loan Easy.

Managing Your Student Loans Through Consolidation

by Darren Cason

Paying interest on several student loans every month, worrying about the upcoming payback on those loans, or seeing that your credit is lower now that you have all those loans on it from school is not a fun thing. It’s something that many people, fresh out of college, have to worry about, though. Thankfully, there is a solution in student loan consolidation. This solution has many benefits.

One of these benefits is usually lower monthly payments, since you only pay fees to one institution and since it’s usually at a lower interest rate and a better payment schedule. Student loans (and consolidations) are regulated and guaranteed by the government, so they have specific interest rates they must offer and specific payback schedules to use. When you apply for student loan consolidation, they usually consider your credit score without the interference of the current student loans, which means your score will be higher and get you a better rate too.

Other benefits can include electronic or automatic payment deductions from your checking or savings accounts, so you won’t forget a payment and you’ll usually qualify for a discount on your interest rate too.

In addition, if you haven’t yet made a payment on your loans because you’re still in your deferment (or grace) period on them, you can probably qualify for better student loan consolidation options than otherwise available. These can include better rates, easier processing of the loan, or even an increase in grace period before your first payment is due.

Often, the loans you received while you were in school are at higher interest rates than you’d get otherwise because the financial institution wanted to get the higher rate and you or your admissions counselor just wanted to get the tuition paid for. Now that you’re looking at those payments, you’re probably regretting those decisions, most especially if you are experiencing a poor credit situation. But there is hope and usually consolidation loans have lower interest rates than what you were given when you applied for the loans to start with.

Because of the government involvement in the rules and regulations of student loans, you could qualify for more options like lower rates, discounts, or even payoffs from grants and more.

So look at what you can gain by getting a student loan consolidation and reducing your payments, interest rates, and more, so you can focus on your new life now that college is over. Student loan consolidations are a quick way to get peace of mind, allowing you to focus on the new life ahead of you.

About the Author:

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