Mortgage Glossary of Terms

Student debt consolidation is when you refinance each of your federal school loans into a single loan that has a fixed interest rate. It is also the term used to describe refinancing a single student loan with a new interest rate. The interest rate of the student debt consolidation loan is derived from the average rate of each of the loans combined. The interest rate you receive when you get a student debt consolidation loan should result in less money spent over the long term of repaying school loans. What many students are unaware of, is that you will be unable to get a student debt consolidation loan to combine your federally funded student loans with your private loans. When you consolidate federally funded school loans, they can only be consolidated with a federal loan program and the federal loan programs will not consolidate a privately funded college loan.

If you do have a combination of privately funded student loans and federally funded student loans, it is definitely worth looking into student debt consolidation even though you will not be able to get one loan for all your debt. Look for government sponsored student debt consolidation programs for each of your federal school loans. These programs are designed to help students get an affordable monthly payment, and while you cannot include private education loans, they do take your payments to the other student loans into consideration when creating your new monthly payment on your student debt consolidation loan. Many federal loans can be consolidated with interest rates of about 4%, which should save you considerable money over the long term. Once you have consolidated the federal loans, you can look into consolidating your privately funded educational loans into a single loan, as well. This is very beneficial if you have more than one private loan with different interest rates. Consolidating will allow you to make a single payment and pay a single interest rate on the total balance rather than keeping track of two or more monthly payments for your private loans. It will save you considerably on interest fees, as well, even if the resulting consolidated loan has a slightly higher interest than the loans individually. When you first graduate college, it can be very difficult to make your school loan payments. Student consolidation loans can go a long way in helping you manage your college expenses as you enter the working world. These kinds of loans are fairly easy to apply for. Federal consolidation programs allow you to fill out online forms in a matter of minutes. Private consolidation loans may be a little more difficult, as the banks are going to base the interest rate and the approval on your credit history and how likely you are to be able to pay your loan back. It may be beneficial for you to get a co-signer on a privately funded school debt consolidation loan in order to get a better interest rate.

Unsecured Loans: Avail Easy Funds Without Any Collateral

There is particularly no need to provide any asset as collateral to obtain finances. Well this is true and it is made possible by unsecured loans . With these loans you can raise the necessary finances to meet some of the needs without the need of attaching any collateral. The amount raised can be used to serve a number of purposes like home improvement, purchasing a car or bike, meeting educational expenses and even consolidating debts.The fact that these loans are available without any collateral opens up a whole new avenue for most of the borrowers. At first there is no risk of loosing your valuable property. Secondly borrowers like tenants and non homeowners who do not have any asset of their own can also apply. In the absence of collateral, the approval of the loan amount is quick as the task of evaluating the collateral value does not take place.

Basically these loans are approved on the basis of your income and repayment capability. For this purpose lender may ask you to provide details about your income, employment status, bank account etc. generally, under this loan plan you can obtain finance in the range of £1000-£25000 to meet the needs. The amount is available for a short repayment period that falls in between 6months- 10 years.The interest rate concerning these loans is slightly higher, as the amount is advanced without any security.

However due to the presence of large numbers of lenders the interest rates vary. If you undertake a proper research you can locate a lender offering these loans at competitive rates. In fact those individuals with bad credit record and have a history of loan defaults, arrears, CCJs, etc can also apply for the loans. But they are needed to convince the lender that they are capable of paying back the loan amount. The interest rate too will be comparatively higher.The best deals on unsecured are available online. The online application process is simple and results in its quick approval. By collecting the quotes and comparing them will assist you further to obtain competitive rates. You should only go for those loans which are easy to repay and suits your financial condition.

New Rules for Reconsolidating Student Loans

In the past, borrowers could refinance their student loans again and again with multiple lenders. On July 1st 2006, Congress reversed this option for borrowers, leaving only a few exceptions for switching lenders. However, on July 1st, Congress also awarded more choices to borrowers seeking their first student loan consolidation, allowing them to shop around rather than being forced to consolidate with the lender who issued their original loans.

In short, borrowers have essentially one shot to choose the right company with which to consolidate student loans, but have more freedom in selecting that lender. If you are currently considering consolidating student loans for the first time, you’ll want to do your research and choose your lender wisely.

Qualities to look for in a student loan refinance company:

• Income sensitive repayment plan
• Money saving incentives
• Accessible customer service
• Online application tracking

You can still switch lenders and reconsolidate under certain circumstances
If you’ve already refinanced, there are still a few possibilities for switching companies and renewing your consolidation loan:

• Your current lender doesn’t offer an income sensitive repayment plan
• One or more federal loans is not included in your current consolidation

What is an income sensitive repayment plan?
An income sensitive repayment plan means that your payment can be adjusted based upon your gross monthly income. Each year, payments are adjusted as your income fluctuates. This is a critical feature in today’s economy where the college tuition costs have risen at a faster rate than the cost of living. ScholarPoint offers a generous income sensitive repayment plan to ensure that student loans never become a burden, no matter your current income level.

7 Little-Known Facts about Refinancing Student Loans

When graduates refinance student loans, it is so simple that many people tend to overlook some of the key factors that can make a major impact on overall cost. By ensuring that you've utilized every money-saving opportunity when it comes to college loan refinancing, you can realize huge savings over the course of the 10-20 years you spend repaying your loan. You might be surprised at how many ways there are to easily save money when you refinance student loans.

Your interest rate will be .60% less if you refinance student loans during the grace period
The single most important way to reduce the total amount you repay is to refinance student loans during the post-graduation grace period. Following graduation, every student has the right to a 6 month grace period before they must begin repaying their loans.
During this grace period, the rates to refinance student loans are a full .60% lower than they are once the loan enters into repayment status. When you refinance student loans during the grace period, you will lock in these lower rates for the entire repayment period.

Lender incentives can save big bucks when it's time to refinance student loans
Not all companies that provide college loan refinance products are created equally, and where they differ the most is in the interest rate reduction incentives offered. Aside from choosing to refinance student loans during the grace period, lender incentives can be the most effective way to shave a big chunk of money off of your monthly payment.
Look for those that offer interest rate reductions versus dollar amount reductions then compare the percentage of the reduction. Reductions for on-time payments and auto debit are the most common types of incentives. While many companies offer a .25% rate reduction for payments made by auto debit, ScholarPoint gives .5%. Many lenders also offer a 1% interest rate for making 36 months of consecutive on-time payments. ScholarPoint offers this 1% rate reduction a full year earlier.

Deferment and Forbearance starts over
Student loans allow a post-grad to put loans on hold for a specific amount of time over the course of the student loan repayment period. During this hold, called a deferment or forbearance, the borrower does not need to make payments on the loan although interest does accrue and is added to the balance of the loan.

The deferment and forbearance benefits aren't lost when you refinance student loans - in fact, the "clock" starts over again so that these hold periods are refreshed and can be used again in full.

You could pay more by incorporating fixed rate loans into your consolidation
The reason it's smart to get started with student loan refinancing now is that most student loans are written with a variable interest rate. This means that every year when the federal government decides on a new interest rate, the payment on your old student loan will change if you haven't refinanced.

However, not all student loans are written with variable interest rates. Some types of loans like the Federal Perkins Loan and the HPSL loan are fixed interest rates, meaning that the rates always remain the same. If the interest rate offered when you refinance student loans is higher than that of your fixed rate loans, then you could actually pay more by adding your fixed rate loans to the mix when you refinance student loans. ScholarPoint lending specialists can help you find the most cost effective solution in terms of which school loans to incorporate.

No reconsolidation after July 1st, 2006
For years, borrowers have enjoyed the flexibility of refinancing student loans multiple times in order to take advantage of better interest rates or to extend their repayment period. As of July 1st 2006, student loan borrowers no longer have this option except for in a few select circumstances. These new limitations are part of the "Deficit Reduction Act," a set of changes in place to begin repair of the nation's rising deficit.

Since July 1st, 2006 borrowers only have the option of college loan refinancing in cases where some of the loans were left out of the original consolidation or the borrower has new college loans to add in or if the current lender does not offer an income sensitive repayment plan. Because borrowers are more or less locked in with the first lender they choose, it's critical to find a lender with a solid reputation and high incentive savings options.

In order to refinance, loans cannot be in default
When refinancing a student loan, the payments must first be current and not in default. Loans that are current include those that are in their grace period, in deferment or in forbearance - as long as there are no payments due.
If you are a month or so behind on your student loans because of extenuating financial strain, try contacting your current lender about securing a hardship deferment before you refinance student loans. Oftentimes, if the payment is just a little overdue and your financial situation qualifies, the lender will backdate the forbearance thus bringing your loan current so that you can move forward in your effort to refinance student loans.

A consolidated education loan cannot combine private and federal loans
If you've got loans from a private lender as well as loans that were granted through a government student loan program, you'll need to secure two different loan consolidations.
Most lenders recommend consolidating federal student loans first, and then working on private loan consolidation afterward. Separate consolidations are only necessary for private and federal loans. Any type of federal loan can be combined such as subsidized and unsubsidized Stafford loans.