The Reserve Bank of Australia (RBA) today cut official interest rates by 25 basis points to 3.00% giving homeowners a boost as Australia's jobs outlook continues to look more grim.
Many economists had predicted no change before this afternoon's announcement. This today is the lowest cash rate since March 1960. The RBA has chopped 425 basis points since September in an effort to keep the economy from slipping into reverse gear.
As always the biggest question is will banks pass the interest rate cut to the consumers in full? The earlier comments from the banks suggest that banks are reluctant to pass more cuts to their customers. Today's 25-basis-point cut, if passed along in full by the banks, will take $46 off the monthly repayment on a $350,000 loan over 25 years.Here at Rate Detective we will keep track of the major banks and lenders home loan interest rate cuts to their customers and will provide the updates as soon as they appear.
Debt consolidation loans areone of the more controversial arenas in the realm of financial planning. Some financial advisors hate debt consolidation, and other advisors love them.In this article we’ll break down the pros-and-cons of such a loan, and consider whether or not it’s actually a good idea.At the end of the article there are some links that can help you continue researching debt consolidation loans. But first, some definitions.
What is a Debt Consolidation Loan
A debt consolidation loan is aloan that you aregiven in order to “consolidate” your other loans. For example, let’s say you have 5 small loans. A debt consolidation loan is where you take one big loan and pay the small loans off — thereby consolidating them.A debt consolidation does NOT reduce your debt directly. It consolidates your debt. I’m still a fan of the loans because I think it should be a given that re-organizing your financial situation makes it much easier to achieve your goals.
If you’re going to get rid of items in your closet, you should probably reorganize and clean it first — same thing goes for debt and debt consolidation loans. Let’s talk about the disadvantages and then the advantages of getting a debt consolidation.
The Disadvantages of a Debt Consolidation Loan
Before we cover the advantages of a debt consolidation loan, let’s look at some of the disadvantages first:
Isn’t Doing Anything. As I explained above, some financial gurus, like Dave Ramsey, are against debt consolidation loans because they think they achieve nothing except organization.
It Takes Longer. Some debt consolidation are where you agree to pay less money, but over a longer period of time. This, of course, depends on the debt consolidation loan itself — each one can be different.If you have any more concerns about a consolidation, feel free to list them in the comments for other readers. Any personal experiences or even professional advice would be appreciated.
The Advantages of a Debt Consolidation Loan
Now let’s check out some of the advantages of a debt consolidation loan.
Lower Interest Rate. A debt consolidation can give you an overall lower interest rate. This mea ns you’ll be p aying “less” for your past loans, while still making it easier to pay the loans at all.
Fixed Interest Rate. Getting a fixed interest r ate is essential for a secure financial plan. A changing interest rate makes your future less predictable. You can “trade” your changing interest rates for a fixed interest rate.
Easy Organization. Having 10 loans and debts to repay and keep up with ca n be hectic — leading to acci dental mixed payments, or just unnecessary discomfort. Getting a debt consolidation loan ends all of this.
How to Get Out of Debt Automatically
The fundamental way to actually use a debt consolidation loan to get out of debt is tounderstand what it is and isn’t doing. It is making it possible for you to automatically get out of debt. Here’s how:
Get a Debt Consolidation Loan.
Get an Online Bank Account.
Get an Automatic Savings Account.
You can automatically pay off the debt with a few clicks of your mouse. As I explain in the last “step” above, you can set your online savings account to put money aside automatically. You can also have that money automatically sentto someone else — like to pay off your debt.By consolidating your debt, and making the payments automatic, you can pay your debts off automatically. Just set up the automatic payments, and pretend like your make just a little less money. You’ll be on your way to getting out of debt in a well-organized and efficient manner.You can do this if you have a debt consolidation because you’ll only have to send money to one company rather than several — streamline your finances, and your finances will take care of themselves.
Conclusion and Last Thoughts
Debt consolidation loans are thought by some to not make a huge change in one’s financial situation. I think that’s a bit wrong, because a consolidation allows one to be more organized and allows one to have a “big target” to hit, making the debt free journey easier.A debt consolidation loan even allows you to set up your finances and banking to pay off your debt automatically — if that’s not a good financial decision, I don’t know what is.
1. Getting “Debt Consolidation” Loans.
Debt consolidation is extremely popular in a lot of circles for a reason: most people who encourage you to “consolidate” your debt will make money if you do. Basically, a debt consolidation is when someone agrees to “consolidate” all of your debt into a new debt with lower interest rates. The only catch is that they’ll force you to stay in debt longer, and you’ll pay more money in the long run. So much for helpful advice.The only time a debt consolidation is a “good” choice is if you simply cannot pay current interest rates. This is rarely, rarely, rarely ever true. Chances are, there’s a better way to pay the payments than a consolidation.Getting a debt consolidation is basically a level of surrender, meaning you’ll be paying more money over a longer period of time. Remember, debt consolidation is also a type of loan — in other words, you’re literally fighting fire with gasoline. Not a good idea.
2. Trying “Debt Elimination” Scams.
If someone offers to “eliminate” your debt without analyzing your situation, just run away. It’s a scam, and they are literally out to get you. There really isn’t anything more to say. The hard truth is that there’s no way to “eliminate” your debt without finding ways to make more or save more money.
3. Closing Credit Card Accounts.
One of the biggest mistakes sounds like it makes sense. Closing a credit account sounds like one is taking control, telling the debtors “no more debt” and is taking a step in the right direction. Unfortunately, it can hurt your credit rating.By closing a credit account, creditors see that you’re movingaway from debt and can’t handle the “temptation” — bad sign. If you feel the need to live without credit, just shred your cards — but keep the accounts open for the sake of your credit score.
4. Making Only Minimum Payments.
Minimum payments are your enemy. The entire reason companies are willing to loan you money is that they’ll be making more. They’re literally selling money for more than it’s worth. The way they make money is through you not paying off your debt as soon as you get it.There’s also a reason the minimum-payment requirement is so low: the lower it is the longer you’ll be in debt. The longer you’ll be in debt, the more they can charge you. Don’t pay the minimum — ma
ke up your own minimum and pay that instead. Shoot for triple the minimum payment, at the very least. Otherwise, you’ll be in debt prison for years longer.
Conclusion
Financial planning is the crux of financial security and freedom. If you want to find a comfortable lifestyle, then it can’t be overstated how much you need to master the basics ofFinancial planning. Without a clear, concise plan for how you are going to manage your money, your chances are slim of ever achieving your goals.To learn more about the fundamentals of financial planning, check out Financial Planning 101, then feel free tobrowse the rest of the pages and guides.
Paycheck loan, personal loan, check advance, paycheck advance, whatever you call it, it is all the same! Getting approved for a paycheck loan on Mypaydayloan.com is as easy as 1-2-3! It is easier than applying for a paycheck loan at a paycheck loan storefront. You don’t have to feel uncomfortable or embarrassed waiting to get approved by not so humbling paycheck loan representatives. You don’t have to gather all your personal information and supply it to these paycheck loan representatives hoping you will get approved by the time the bank closes.
Mypaydayloan offers a fast application for a paycheck loan, no waiting in lines. Simply fill out the online paycheck loan application, electronically sign the paycheck loan contract and submit. To get approved for your paycheck loan, you need to wait about an hour, depending on what time and day you apply. Once you are approved for your paycheck loan, just wait for the funds to be deposited into the bank checking account through ACH the very next business day.
Short Term Paycheck Loan
Paycheck loans are meant to be short term loans where you make a payment on your due date. To get approved for a paycheck loan from Mypaydayloan, you must make sure that you get paid twice a month, or bi-montly. The payment for your paycheck loan will be deducted from your bank checking account on your payday. Mypaydayloan advises all its customers to pay the paycheck loan off in a relatively short amount of time so that they are not spending all their money on fees. When you pay the minimum payment on your paycheck loan, you are only paying on the fee, and this accumulates every two weeks, which is when your paycheck loan is due. This can be very cumbersome because over time you pay a lot on fees and then in the end you still have to pay the principal amount, or the amount borrowed, of the paycheck loan.
Payday Cash Advance Loan
Payday loans are short-term cash advances designed to meet your emergency financial needs. Payday loans are also perfect for those times when you need a little extra cash for unexpected bills or special occasions. The fee for a cash advance is $25.00 for every $100.00 borrowed. For example, loans in the amount of $300.00 have a payback amount of $375.00. Payday loans are generally paid back within two weeks, however, you can extend the payday loan. To extend a loan you simply make at least the minimum payment owed on the cash advance. First-time borrowers of payday loans can request up to $600.00.
How to get a no fax cash advance
There are very few requirements for a no fax payday loan: a checking account that is at least 90 days old, employment of at least 6 months, and a monthly net income of at least $1000.00. The application process for a free payday loan* is simple; no faxing is required. If your online cash advance application is approved by 5 pm est, monday - friday, then you will receive the cash overnight. You can apply for a $400 loan and no faxing is required at all.
How do payday loans work?
Once your payday loans application is approved, you will receive the funds in your checking account the next business day. You will then be asked to submit a payment request which tells us how much you want to pay on your personal loans when it is due. Be sure to submit a request or the entire amount will be debited from your account by default. When payday loans are due, the money is debited directly from your checking account on your due date. Once you have paid off your payday loans, you can continue to apply for bad credit payday loans of up to $1000.00.
Quick Paycheck Loan Online lenders allowed almost anyone over the age of 18, who has a job to apply for a short term paycheck loans. As long as they had a checking account, and earned over $1000 per month, they would receive a cash loan quick, usually within the same day. Loan companies provide online cash loans overnight with repayment terms that range from 4 to 32 days, but most often the loan must be repaid with the next paycheck. Loans can be used to pay off some or all of the current bills that cannot wait until payday. However, there may be some changes ahead. All online cash loan companies must be licensed in each state in which they operate as precaution against unscrupulous business practices. Consumer protection is paramount among elected officials. Each State's governing body sets their own rules that vary from jurisdiction to jurisdiction. For example, payday cash advances, or short term paycheck loans as they are often called, range from a low of $250 to $1000, and in some states even more. Many states require a physical presence within its boundary in order to allow a company to offer payday loan services. Some states don't allow banks to use their charters for storefront payday loan companieshttp://paydayloan2009.blogspot.com/, which in the past, was a common occurrence. Short Term Paycheck Loans Some states are more friendly to individuals who need a short term paycheck loans. They make it difficult for paycheck loan companies to charge high fees. Other states ban or limit rollovers, or prohibit lenders from offering a customer more than one paycheck loan at a time, while still others do not allow options for refinancing or consolidate debt loans.http://consolidate-creditcarddebts.blogspot.com/ Many state legislators are now considering additional rules to tighten up their particular regulations in order to conform with their neighboring states that may have more consumer friendly rules. Iowa is just one such example of a state that recently made some adjustments to it's lending regulations. Most companies put their best foot forward to attract new business. They recognize that their best customers are repeat clients. The convenience of getting a short term paycheck loanshttp:// nofaxpaycheckloans.blogspot.com/ with just an online cash loan application is worth the higher interest rate, particularly when compared to the NSF charges for bouncing a check. Since each state has a different set of rules, almost every company operating within that jurisdiction will have current and pending regulations at the top of their agendas. In order to relieve the stress of dealing with overdue bills and late banking charges, searching out which companies offer the most current information is perhaps the safest way to protect yourself when using a short term paycheck loans.
Equity Loans, LLC Specializes in residential mortgage lending. As a licensed mortgage banker Equity Loans LLC is a direct lender for Fannie Mae, Freddie Mac, HUD FHA, Veterans Administration, construction and refinance loans. Whether you want to purchase or refinance a primary home, a second home or investment property, let Equity Loans LLC help simplify the mortgage process for you.In December 2006, Equity Loans LLC joined the LendingTree network, the industry's leading online mortgage lender dedicated to bringing consumers direct access to the most diverse array of mortgage products available. Currently, we are ranking as a Tier 1 lender (Top 15) with LendingTree.
LendingTree is the leading online lending and realty services exchange that empowers consumers to choose the loan that's best for them. Like Equity Loans LLC, LendingTree believes in creating choices, convenience and value while finding the loan that's the perfect fit for consumers. By closing your loan Equity Loans LLC who specializes in helping homebuyers and homeowners find the loan they need, LendingTree can provide its extraordinary level of service directly to consumers.
Equity Loans LLC closes thousands of mortgage loans annually, including home equity, refinance and purchase loans. Since its inception, Equity Loans LLC has specialized in finding a loan for every home. Its Atlanta, Georgia location also internally houses its Sales & Loan Fulfillment, to allow us to close loans in days not weeks.
Absolutely. Equity Loans LLC has a diverse array of mortgage products that cover a wide spectrum of financial and credit profiles. Our specialty is finding a loan for every home no matter how unique your situation. What's more, our generous satisfaction guarantees apply to every borrower, not just the prime credit consumer. No matter what your situation you can be confident that Equity Loans LLC will give you the best program with the best rates and service. Best of all, there's no cost or obligation to apply for a loan or get a custom loan search.
A direct lender works directly with the consumer to originate, process, approve, and fund a mortgage loan. Direct lenders can simplify the mortgage process. Unlike traditional or online mortgage brokers who tend to act as middlemen, simply taking your application and then passing you off to a lender, Equity Loans LLC controls the entire process from beginning to end. Because there are no additional layers, direct lenders can often offer consumers better interest rates, better customer service, and more accurate information, meaning you receive real-time rate quotes that are based on your individual information and the personalized service to help you understand your offer completely.
Once you complete a custom loan search our Personal Loan Center allows us to create a user name and password and save your program search results in your very own online resource center. Your personalized loan center can be accessed at any time - 24 hours a day, 7 days a week - as often as you'd like, once you have decided that Equity Loans LLC is the best option to help you accomplish your objectives.
We make your mortgage process as painless as possible. Equity Loans LLC can process your loan quickly and efficiently without requiring you to ever make an office visit. The entire process can be completed in the comfort of your home or office through email and phone communication. Whether you apply online or over the phone, we will match you with your own personal loan specialist who will guide you through the entire process and answer any questions you may have. Along the way you can check the status of your home loan application by calling your loan specialist or logging on to Equity Loans LLC loan status feature available on our website. We believe that you deserve to know what's happening with your money and we've built our customer service around keeping you informed.
Equity Loans LLC’s custom-built Loan Origination Software System that automates many of the common loan processing functions to deliver a smoother process and faster closing times for our customers no matter how complex your credit situation.
is a Pleasanton, California-based financial services company that offers savings accounts and certificates of deposit (CDs) and access to partners that may be able to assist customers in obtaining loans.In October 2008, E-Loan's parent company, Popular, Inc. said E-Loan would no longer operate as a direct mortgage lender in 2009, but would continue to provide certificates of deposit and savings accounts. Operational, general and administrative support functions would be transferred to other Popular subsidiaries.Company officials said customers who have already obtained loans through E-Loan would not be affected.
History
E-Loan was founded by Janina Pawlowski and Chris Larsen in 1997 to provide customers with access to mortgage loans over the Internet. In 1998, the company received venture capital funding from Sequoia Capital.
Challenge
Re-engage Online Loan Applicant Mortgage applications are notorious for being long and complicated. E-LOAN has worked hard to change that perception by developing a simple online application that guides borrowers through the process. Even so, many borrowers abandon the application before completing it. The challenge for E-LOAN was to create a cost-effective process to re-engage these customers and get them to complete their applications.
Solution
Automated, Event-triggered ProgramsUsing the Responsys Interact® on-demand marketing platform, E-LOAN implemented anevent-triggered, multi-stage email program to remind and encourage borrowers to completetheir mortgage applications. The program was executed in two waves.The first campaign, triggered 30 minutes after the application was abandoned, reminded applicants to complete the process, provided a quick link to the partially completed application, and encouraged applicants to use phone support. The second campaign, sent oneweek later, called the applicant’s attention to the company’s value proposition and offereda quick link to the incomplete application.E-LOAN also worked with Responsys to build two-way integration with the company’sdata warehouse as well as custom enhancements to the platform to support A/B andcontrol testing requirements.In a separate program, E-LOAN targeted applicants who were approved for an auto loanbut ultimately did not fund the loan. Assuming that these individuals opted for dealer financing,E-LOAN issued a refinance offer via email and direct mail to qualified applicantsafter funding was initilly approved.
Results
Higher Open Rates and Increased Customer RetentionE-LOAN has garnered outstanding response rates. The company reports that open ratesare 56% higher than average, and CTRs are 161% higher than the financial services average.The real stand-out is the auto refinancing program, which has yielded a 300% lift inresponse over the control group.
Key learnings:
Automation is critical. We used to send this type of campaign once a week on a manualbasis. It wasn’t scalable and lacked the immediacy of the 30-minute trigger, whichoperates 24/7.Build intellectual capital. The automated programs don’t rely on one employee whomight jump ship along with his accumulated knowledge. Don’t be left high and dry whena skilled employee leaves. Continual testing. Our testing platform lets us continually test and learn with very littleincremental investment.Not everything is incremental. Measuring campaigns against a holdout cell is criticalto understanding whether the campaign has value. This is especially important formultichannel marketers who generate awareness and interest through channels other than email.
Parents can borrow a PLUS Loan to help pay your education expenses if you are a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school. PLUS Loans are available through the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Your parents can get either loan, but not both, for you during the same enrollment period. They also must have an acceptable credit history.
How do my parents get a loan?
For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory note, contained in a single form that you get from your schools financial aid office.For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available from your school, lender, or your state guaranty agency. After the school completes its portion of the application, it must be sent to a lender for evaluation.Also, your parents generally will be required to pass a credit check. If your parents don't pass the credit check, they might still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan. An endorser promises to repay the loan if your parents fail to do so. Your parents might also qualify for a loan without passing the credit check if they can demonstrate that extenuating circumstances exist. You and your parents must also meet other general eligibility requirements for federal student financial aid.
How much can my parents borrow?
The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. If your cost of attendance is $6,000, for example, and you receive $4,000 in other financial aid, your parents can borrow up to $2,000.
Who gets my parents' loan money?
Either the U.S. Department of Education (for a Direct PLUS Loan) or your parents lender (for a FFEL PLUS Loan) will send the loan funds to your school. Your school might require your parents to endorse a disbursement check and send it back to the school. In most cases, the loan will be disbursed in at least two installments, and no installment will be greater than half the loan amount. The funds will first be applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, your parents will receive the amount as a check or in cash, unless they authorize the amount to be released to you or to be put into your school account. Any remaining loan funds must be used for your education expenses.
What's the interest rate?
For PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed (at 7.90 for Direct PLUS Loans and 8.50 percent for FFEL PLUS Loans). For PLUS Loans disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable and is determined on July 1 of every year. For 2009-2010, the variable rate for these PLUS Loans (in both the Direct and FFEL programs) is 3.28percent. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.
Other than interest, is there a charge to get a PLUS Loan?
Your parents will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. For a FFEL PLUS Loan, a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that administers the PLUS Loan Program in your state) to help reduce the cost of the loans. For a Direct PLUS Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, your parents may be charged collection costs and late fees if they dont make their loan payments when scheduled.
When do my parents begin repaying the loan?
For PLUS loans made to parents that are first disbursed on or after July 1, 2008, the borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or wait until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis.
How do my parents pay back these loans?
They'll repay a FFEL PLUS Loan to a private lender or loan servicer. They'll repay their Direct PLUS Loan to the U.S. Department of Education's DirectLoanServicingCenter. To read more about repayment options under both programs, read the PLUS Loans section in Funding Education Beyond High School: The Guide to Federal Student Aid.
Is it ever possible to postpone repayment of a PLUS Loan?
Yes, under certain circumstances, your parents can receive a deferment on their loans.If they temporarily cant meet the repayment schedule, they can also receive forbearance on their loan, as long as it isnt in default. During forbearance, their payments are postponed or reduced.Generally, the conditions for eligibility and procedures for requesting a deferment or forbearance apply to both Stafford Loans and PLUS Loans. However, since all PLUS Loans are unsubsidized, your parents will be charged interest during periods of deferment or forbearance. If they dont pay the interest as it accrues, it will be capitalized (that is, added to the principal amount of the loan, and additional interest will be based on that higher amount).
Can a PLUS Loan be discharged (canceled)?
Yes, under certain conditions. A discharge (cancellation) releases your parents from all obligation to repay the loan.Your parents PLUS Loan cant be canceled for these reasons: You didnt complete your program of study at your school (unless you couldnt complete the program for a valid reasonbecause the school closed, for example), you didnt like the school or the program of study, or you didnt obtain employment after completing the program of study.For more information about loan discharge or repayment: If your parents have a Direct PLUS Loan, they should contact the Direct Loan Servicing Center at 1-800-848-0979, or go to www.dl.ed.gov. If they have a FFEL PLUS Loan, they should contact the lender or agency holding the loan.
Plus Loan Interest Rate
The Federal Parent PLUS Loan for Undergraduate Students enables parents and legal guardians with good credit history to pay the education expenses of each dependent child enrolled as an undergraduate at least half time in an approved college or university. These loans are available through the Federal Family Education Loan (FFEL) Program.
PLUS Loan interest rates are fixed for all new PLUS Loans at a rate of 8.5%. These loans will not have variable interest rates.
You may receive a 0.25% repayment interest rate credit when payments are set up for automatic debit from a bank account
Interest may be tax deductible under the Hope Education Tax Credit.
There is no penalty for early repayment, and consolidating your loans after each academic year is easy. It also lowers your monthly payment. Click here for PLUS Consolidation!
Funds are usually disbursed quickly, during the first weeks of the semester. Interest accrues from the time of disbursement.
The primary benefit is that families can borrow federally guaranteed, low interest loans to help pay for their child's education, without needing to worry about collateral, need-based forms, or FAFSA preparation time. Use our online application to Apply Today!
Compare Federal PLUS Loan to Private Loans
Federal Parent PLUS Loans and Private Student Loans can both help cover the difference between your total cost of education and other financial aid you have received. Both loans can be used to pay for educational expenses such as tuition, books, housing, school fees, student computers, supplies and more.One of the biggest differences between these two student loans is the interest rate. Federal PLUS loans are based on a fixed interest rate (8.50%). Private Loans have a variable rate and are based on a published index (Prime or LIBOR) plus a margin for borrower credit.We recommend that you always exhaust Scholarships, Grants and Federal Loans, like the Parent PLUS Loan, before applying for Private Loans.
Federal PLUS Loan and Private Student Loan Comparison
Federal PLUS and "Certified" Private Student Loans are both disbursed to the school's financial aid office. The chart below illustrates differences and similarities:
A Parent 's Credit Report and PLUS Loans
The PLUS Loan can be provided to you, the parent, as a non-need based loan specifically because it is a credit-based loan, similar to a personal line of credit. As such, it's vital to know exactly where your credit stands.
What is credit?
Credit is a record of how timely you are in paying back money you have borrowed. Your credit is stored as a report and a score at a credit bureau. The Student Credit Card Center has put together a wealth of information of how to get credit, improve your credit, repair your credit, and apply for the best student credit cards.For those of you who need information on where your credit is now, Click here to obtain your credit report and score!
How is credit judged?
Credit scores are numerical indexes based on an algorithm developed by Fair Isaac Company, called a FICO score. Scores are negatively impacted by events such as late payment, incomplete or partial payments, defaults, and judgments or liens, and range from 300 to 900. The actual algorithm is a trade secret of Fair Isaac, but the following breakdown approximates the weighted values that compose your score.
35% Payment history
30% Outstanding debt
15% Length of your credit history
10% Recent inquiries on your credit report
10% Types of credit in use
The "average" credit score for "good" credit is 675 or better for most major lenders, such as mortgage lenders. Scores lower than 625 demand scrutiny, while scores lower than 600 will often be denied outright. For in depth articles and research on student credit, please visit the Student Credit Card Center.
What is the required credit score for the Parent PLUS Loan?
Eligibility for the PLUS Loan depends on a modest credit check that determines whether the parent as an adverse credit history. An adverse credit history is defined as being more than 90 days late on any debt or having any Title IV debt (including a debt due to grant overpayment) within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off.
Plus Loan Borrower Benefits
With rising tuition costs, the Parent Plus loan is a practical way to fund your child's education. While Stafford loans and other financial aid may help to cover some costs, they usually are not enough to cover what is due. The PLUS loan can be used to pay tuition and any eligible school expenses, minus any other aid the child receives. Parent Plus loan benefits include:
Fixed 8.5% interest rate
0.25% repayment interest rate credit when payments are set up for automatic debit from a bank account
Fund up to the cost of education minus other aid received
Deferment and forbearance options if you experience financial difficulties
10 year repayment term
The primary benefit is that families can borrow federally guaranteed, low interest loans to help pay for their child's education, without needing to worry about collateral, need-based forms, or FAFSA preparation time. Use our online application to Apply Today!
PLUS Loan Frequently Asked Questions
Student Loans from the Student Loan Network offer a variety of education loan programs for students and families, including the PLUS Loan. Below are answers to our most frequently asked questions on the PLUS Loan.
Do I need to fill out the FAFSA?
It is not required at all schools, but it is strongly recommended. The PLUS Loan is a federal student loan and therefore must be "certified" (approved) by the college's or university's financial aid office. If your college or university requires the FAFSA for all students, they will not certify a PLUS Loan (even though it's a loan for the parents) without a FAFSA on file. Check with your school's financial aid office for their specific policy.Click here for information about how to file your FAFSAFiling the FAFSA is a good idea because you or your child may be eligible for more financial aid than you think. Filing the FAFSA does not impact your eligibility for the PLUS Loan, as the PLUS Loan is based on credit, not need.
What is the interest rate?
The interest rate for a Parent Plus loan is 8.5% fixed. Interest accrues on this loan when it is disbursed to the school. You may receive a 0.25% repayment interest rate credit when payments are set up for automatic debit from a bank account.If you are a parent with PLUS Loans and you want to lower your monthly payment, you may consider consolidating your PLUS Loans after the final disbursement for each academic year. Click here to consolidate your PLUS Loans!
What are the fees for a PLUS Loan?
Parents are required to pay a 3% origination fee. A federal default fee of 1% may also apply. These fees are deducted from the principal at each disbursement.
When my child is done with school, can I transfer the PLUS Loan to them?
No. The PLUS Loan is a Parent loan, taken out in the parent's name. The student is not the borrower. If, as a parent, you are interested in a loan that has such a feature, you'll need to resort to private student loans. These loans are in the student's name, and depending on the lender, may have a cosigner release option. After a certain number of consecutive on time payments, the parent (as a co-signer) can apply to be released from the loan, making it entirely the student's obligation.
I'm an uncle/grandmother/friend - can I take out a PLUS Loan?
PLUS Loans are restricted to the parents or legal guardians of a dependent undergraduate student. Again, if you're interested in cosigning a loan for someone who is not your child, you'll need to borrow a private student loan.
What kind of credit is required for a PLUS Loan?
Eligibility for the PLUS Loan depends on a modest credit check that determines whether the parent has an adverse credit history. An adverse credit history is defined as being more than 90 days late on any debt or having any Title IV debt (including a debt due to grant overpayment) within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off.Click here to learn more about credit!
What if I am not approved for the PLUS Loan?
There are several options if you are not approved for the PLUS Loan, as some applications are declined for reasons other than poor credit. If you are declined, you can:
Apply for a Private Student Loan
Find a co-signer and apply again
I already have a PLUS Loan. How can I find out more information about it?
You can check the status of your loans by using the National Student Loan Database System (NSLDS). You can access NSLDS for free at www.nslds.ed.govYou will need a Federal student aid pin to access this site. If you do not know your pin you can access it at www.pin.ed.gov
When do I begin repaying a PLUS Loan?
Parents now have the choice of making payments while the student is in school or deferring payments until the student graduates. If you choose to pay after graduation, interest will accrue from the time of full disbursement. You can choose to pay the interest monthly, or you can defer both interest and principle until the student graduates. If you choose not to pay the interest monthly, it is capitalized no more than four times per year.
Can I use a Parent Plus Loan for my child's off campus rent?
Parent Plus loans are typically used to cover the rest of tuition due after the student's aid is exhausted. The school must certify the loan amount, so if you want to borrow more than what is owed to the school you would have to check with the financial aid office at the school.
Are there any penalties for paying the loan off early?
There are never any pre-payment penalties for Parent Plus loans. If you pay the loan in full you will not be responsible for any future interest, and you will not be charged with any penalties.
Can I apply for all four years at once, or do I have to apply for a new PLUS loan every school year?
You cannot apply for all four years at once. You must apply for Parent Plus loan each school year that you wish to borrow it. If you borrow the PLUS loan for all four years of college, then you will end up with four separate Parent PLUS loans. You can choose to consolidate these together, or pay them separately. You can also consolidate your PLUS loans after each school year which would give you a lower monthly payment while your child is in school.
Private Education Loans, also known as Alternative Education Loans, help bridge the gap between the actual cost of your education and the limited amount the government allows you to borrow in its programs. Private loans are offered by private lenders and there are no federal forms to complete. Eligibility for private student loans often depends on your credit score.
Some families turn to private education loans when the federal loans don't provide enough money or when they need more flexible repayment options. For example, a parent might want to defer repayment until the student graduates, an option that is not available from the government parent loan program. (Many PLUS loan providers are starting to allow parents to defer payments on the PLUS loan while the student is in school using an administrative forbearance. Interest continues to accrue, however.
Private eduation loans tend to cost more than the education loans offered by the federal government, but are less expensive than credit card debt. The federal education loans offer fixed interest rates that are lower than the variable rates offered by most private student loans. Federal education loans also offer better repayment and forgiveness options. Since federal education loans are less expensive than and offer better terms than private student loans, you should exhaust your eligibility for federal student loans before resorting to private student loans.
Private student loans typically have variable interest rates, with the interest rate pegged to an index, such as LIBOR or PRIME, plus a margin. The LIBOR index is the London Interbank Offered Rate and represents what it costs a lender to borrow money. The Prime Lending Rate is the interest rate lenders offer to their most creditworthy customers. A rate of LIBOR + 2.8% is roughly the same as PRIME + 0.0%. The spread between LIBOR and PRIME has been growing over time. So all else being equal, it is better to have an interest rate pegged to the LIBOR index, as such a rate will increase more slowly than a rate pegged to the PRIME index.
The interest rates and fees you pay on a private student loan are based on your credit score and the credit score of your cosigner, if any. Generally, if your credit score is less than 650 (FICO), you are unlikely to be approved for a private student loan. An increase of just 30 to 50 points in your credit score is often enough to get you better terms on your loan.
t is better to apply for a private student loan with a cosigner even if you could qualify for the loan on your own. Just applying with a cosigner usually results in a slightly lower rate, as such loans are not as risky for the lender. Moreover, the interest rates and fees are usually based on the higher of the two credit scores. So if your cosigner has a much better credit score than you, it could result in a much lower interest rate.
Private student loans may be used to pay for the EFC, the family's portion of college costs. While some lenders may offer private student loans in excess of the cost of attendance, any amount exceeding the difference between cost of attendance and financial aid is considered a resource. Like an outside scholarship, this will reduce need-based aid. (Some lenders offer non-school-certified private student loans to bypass this limitation by not informing the college about the loan. If the college becomes aware of the loan, federal regulations require the college to reduce need-based aid. Pending federal legislation would require lenders to tell colleges about all private student loans, eliminating this loophole.) This cost-of-attendance limitation only applies to education loans, which are loans that make enrollment in college a condition of the loan. It does not matter where the loan proceeds are sent (e.g., direct to the borrower vs to the school) or how the loans are marketed. On the other hand, mixed-use loans, such as home equity loans and credit cards, are not considered education loans and as such are not limited by cost-of-attendance.Lenders provide different types of private education loans depending on the student's level of study.
Private Students Loan Benefits
Flexibility is one of the key benefits of private student loans. Unexpected expenses can come up anytime during the semester. A Private student loans gives you the flexibility to apply whenever the need arises during your time as a student.Another important benefit - private loan eligibility is not restricted based on financial need. This simply means you can borrower what you need, up to the total cost of your education, in order to pay for additional expenses such as supplies, housing, transportation, etc.
Benefits of Private Students Loans
Coverage and Versatility
Private student loans are a handy form of financial aid that can be used to cover expenses not met by federal financial aid. In addition to tuition and room and board, private student loans can be used to cover virtually any school related expense:
Transportation and housing expenses
Books, supplies, Lab fees and computers
Flexibility
Deadlines, deadlines, deadlines. It seems at every turn in financial aid, there's another deadline to watch. Also, additional expenses may creep up during the semester that weren't originally considered. Private student loans give you the flexibility to apply whenever the need arises during your time as a student. While federal loans may not disburse until a month into the semester, these private student loans can fund in a matter of days after receiving your completed application.E-Signature helps make it faster to apply and submit your application. To help speed up the process even more, we recommend having your social security number, co-signer and reference information available when you apply.
Simplicity
Scholarships and federal financial aid are restricted. Federal financial aid and federal student loans are based largely on demonstrated financial need (except for the PLUS loan), grade level, and student status. In some cases, federal financial aid may be very little help. Private Student Loans don't require lengthy applications or paperwork like the FAFSA. Most important, private student loans are not need-based, which means that eligibility is not confined to the neediest students.
Savings
0.25% repayment interest rate credit when payments are set up for automatic debit from a bank account
Private Students Loan Overview
Private student loans are a great college financing option that can help cover additional costs not covered by federal financial aid. A private student loan can be used to pay for normal tuition expenses, but can also cover books, supplies, housing expenses, school fees, transportation, and more.
What Makes Private Students Loan Different?
Unlike federal loans, private student loans do not require the FAFSA. However, a credit check for the primary borrower and a co-signer is needed to qualify. The interest rate is variable and based on Prime index plus a margin for borrower credit.
Private Students Loan Interest Rates
How are private student loan interest rates calculated?
Private student loan interest rates are calculated based on a published index such as the Prime Rate or LIBOR (London Inter Bank Offering Rate) plus a margin based on your credit score and credit history. If a cosigner is required, your interest rate will be determined based on your credit, and your cosigners' credit.Because the interest rate is variable, it will fluctuate over time. Interest begins accruing when the loan is disbursed.
hat will your private student loan interest rate be?.
It's not possible to determine your exact rate unless you apply for a private student loan. However, you can get a feel for where your general interest rate is based on your credit report. The more late payments, overdrawn accounts, and other credit issues there are, the more likely it is your interest rate will be higher.We always recommending checking your credit report and ensuring that it's free of errors, omissions, and inaccuracies before applying for any student loan so that you get the best interest rate possible. Check and improve your credit score here.
How to Lower your interest rate
Some private student lenders offer discounts to borrowers for automatic debit or consecutive on-time payments. This can translate into significant savings over the course of repayment. The typical discount is 0.25% for signing up for automatic debit. It is recommended that you contact your lender for a full list of deferment options.Apply with a cosigner. Not only will you increase your chance of getting approved, but you can potentially lower your interest rate, depending on you and your co-signers credit.For more information about private student loans, check out our private loan comparison page, or simply get started and apply for a private student loan.
Private Student Loan Eligibility
In order to be eligible for a private student loan, applicants must be enrolled at least half-time at an eligible school and typically meet the following requirements:
Must be a U.S. citizen or permanent resident
You and your cosigner must pass a credit check
What is Considered Good Credit?
It is recommended that you review your credit report before you apply for a private student loan. Creditors look at Personal data such as employment history, a summary of credit history, details of any accounts turned over to a credit agency, and your current FICO score. Get your FICO score now and improve your credit score.
Apply With a Cosigner
While not all private student loans require that you apply with a cosigner, having a credit worthy cosigner can increase your chances for approval and potentially give you a lower interest rate. Learn what it means to be a cosigner
Private Student Loan Repayment Option
When applying for a private student loan, one very important feature set to consider is the repayment options offered. Many borrowers are not aware of the different types of helpful budget friendly repayment plans offered through their lender.In most cases, lenders generally offer the same type of repayment options. These include full loan deferral, interest only repayment, or immediate interest and principle repayment.
Standard Private Student Loan Repayment Plans
Full Deferral:
No principal or interest payments are due while enrolled in school (up to four consecutive years). Payment of principal and interest will begin 6 months after graduation, or if enrollment drops below half time. Interest will continue to accrue during the deferment period and will be capitalized (added to the loan) at the time of repayment.
Interest Only:
Pay only accrued interest while enrolled in school (up to four consecutive years). Payment of principal and interest will begin either 45 days after graduation or if enrollment drops below half time.
Immediate Repayment:
Payment of principal and interest will begin immediately after the loan is fully disbursed.
Private Loan Repayment Term
Depending on the total amount borrowed, repayment terms for private student loans typically range from 10 - 25 years - The higher the loan amount, the longer the term.Private student loan consolidation is an option available to borrowers once they begin repaying their loans. Consolidation allows borrowers to refinance their loan, potentially secure a lower interest rate, and lengthen the term of repayment in order to lower monthly payments.Deferment options such as economic hardship, public service, unemployment, etc. may be offered to those borrowers who qualify. It is recommended that you contact your lender for a full list of deferment options.For more information about private student loans, check out our private loan comparison page, or simply get started and apply online.
