Wednesday, April 18, 2007

Student Loans - Convenient and Easier Loans

A student loan can be a convenient option of sponsoring your studies. Student Loans help the students pay off their tuition fees, along with the other living expenses, which include lodging, books, food and other charges. The amount of loan advanced will depend on the actual requirement and the financial condition of the family.

Student Loans are also available to those who turn out to be ineligible for the regular unsecured low interest student loans. These other loans are normally called Parent Plus loans or private alternative loans, or just “alternative loans”. These are basically loans made with a co-signature from the parents. In effect it’s no different from a young person buying a car with a parent’s co-signature. Both the student and the parents are on the hook for repayment of the loan.

Currently, student loans have the best interest rates in town. As the interest rate index rises, so will the student loan rate. During low rate times, many scramble to consolidate their student loans. This saves a tremendous amount of interest in the long run.

Make regular payments

Pay regularly and on time. If you make 48 consecutive on-time payments, most private lenders will knock two percentage points off your interest rate. Plus, if you direct your bank to transfer payments electronically from your checking account, many lenders will trim a quarter of a point off your rate.

Explore repayment plans

Ask about alternate forms of repayment. If you have difficulty meeting your payments, ask about alternate repayment plans. Assuming your salary will go up over time, you can arrange a graduated repayment plan. You begin with a low monthly payment that slowly rises over a period of 12 to 30 years, depending on the size of the loan.

Managing your multiple student loans are not too hard but you can make them more convenient and easier by combine them into one through the student loan and enjoy the benefits it can offers. However, before enrolling into any of the student loan, you need to understand the details and ensure the package is really inline with you financial needs.