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Finding a Cosigner When Your Parents Aren’t an Option

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You may need a cosigner for a financial product if your credit score isn’t up to par. Here is some information on cosigners, why you may need one and what your alternatives might be.

What Exactly Is a Cosigner?

A cosigner is a person who agrees to take full responsibility if another person defaults on a loan product. Such people usually have excellent credit scores and strong reputations with credit bureaus.

A cosigner situation can occur in various loans, but they’re most common in student loans and other instalment loans. According to Ascent Funding, it’s quite common to have private student loans with a cosigner. An automobile loan or regular personal loan may require a cosigner, as well.

When Could You Need a Cosigner?

You may need to request a cosigner if you have less-than-desirable credit. The lender might be a bit nervous about you and want to be reassured they will receive repayment for the loan product.

According to Ascent Funding, “if you don’t qualify for a loan in your own name,” you should consider applying with a creditworthy cosigner.

A lender may also ask for a cosigner if you’re new to the credit world and don’t have a history with any creditors at all. They may be willing to provide you with the loan funds but still want a little reassurance.

Four Alternatives to Having a Cosigner

Other alternatives are available if you don’t have a traditional cosigner, such as your parents in mind for your loan product. You have the option to ask a friend or family member to cosign for you instead of your parents.

This person will have to know you very well and have faith that you understand how important it is to repay your loans on time. You can sit down with the person and discuss the cosigning situation when no distractions are apparent.

You may have to settle for taking a much higher interest rate for a while. This may be more true with an auto loan than other types of loan products. The good news is that you may be able to apply for a refinance loan when some time passes.

You might also be able to talk to the loan company and see if they will take a larger down payment to compensate for the lack of credit score qualification. Larger down payment may make the lender a bit more confident that you’re fully invested in the product and repayment.

You could also try looking for help from a non-traditional lending source. Many lenders are open to the idea of helping people who have less than perfect credit. Thus, you can try to apply with that type of lender. You could also go in the direction of a peer-to-peer lender for help. Peer-to-peer lending involves people who want to invest in helping other people.

Should You Wait to Borrow Instead?

In some situations, you may prefer to wait a little while before you request a loan. For example, you might want to work on boosting your credit score for a few months before applying for a student loan, car or home. That decision will depend on where you stand financially, but it’s perfectly acceptable for you to do so.

Now you know more about cosigning and how it can work for you. Use the information above to take the next steps toward getting the perfect loan products.

How to Choose a Private Student Loan

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How do you choose the best private student loans for undergraduate college students?

This is an important question to ask in your decision-making process because some options are better than others.

First, make sure that you’ve already explored other options like scholarships, federal student loans, grants, and work-study programs.

If you come to the conclusion that private student loans are the best option for you, it’s time to decide which types are the best.

In this article, you’ll find the most important factors to consider when choosing a private student loan.

Private Student Loan Factors to Consider

Most universities provide financial aid services, however, it may not always be sufficient to cover the cost of attendance.

This is why many students choose to subsidize scholarships with student loans. Others choose to entirely depend on student loans to pay for college expenses.

When choosing which private loan to use, consider these factors:

  • Interest Rates
  • Fees
  • Bank Lender
  • Flexibility for Repayment
  • Deferment Options
  • Cosigner Release Options
  • Repayment Terms

Don’t just stick to one bank lender before comparing their interest rates with other lenders. This is important because it can determine how manageable repaying the loan will be.

Interest Rates

High interest rates can affect how much your balance grows, and how much you end up paying.

Unlike federal student loans, private lenders will base the interest rate on your credit score. This is a big deal because even if they advertise a low interest rate, yours may end up being higher because of your credit score.

Only people with excellent credit scores are likely to get low interest rates from private lenders. Keep this in mind so that you don’t get misled by the attractive rates they advertise!

Depending on your credit score, interest rates should range between 5% to more than 12%. Make sure that you compare different lenders to make sure that you are getting the best option possible.

Fees

Another important factor you should consider is the additional fees private lenders charge.

Private lenders could charge fees for:

  • Defaulting on your student loan
  • Paying off student loans early
  • Late payments
  • Returned payments
  • Putting your loan into deferment

Remember that fees can add up if you are not aware of them beforehand. Some private lenders are more flexible than others, so keep that in mind during your research process.

Repayment terms

Generally speaking, private student loans are not very flexible in comparison to federal student loans.

However, you still need to be sure of what the repayment terms are and find the one that is best suitable for you.

Types of repayments options

  • Fixed monthly payments
  • Interest-only payments
  • Deferred payments
  • Income-driven repayment plans

Make sure you know how much your monthly repayments are before agreeing to the private student loan terms.

The monthly amount should also be something you’re comfortable paying because defaulting will hurt your credit and affect your ability to secure new loans.

If you do your research well and are sure of all the terms and conditions, then you should be ready to get a private student loan.

Remember to take your time, and weigh your options before making a final decision.

Essential Tips for Students Using Credit Card

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Credit cards have emerged as one of the best payment methods in the world today, owing to the amount of convenience they offer to consumers. Additionally, credit card companies are constantly evolving and providing discounts and special offers to customers, who would be unlikely to find these elsewhere or through any other payment mechanism.

Among consumers today, students are the most stuck for finances as they have to balance their educational and social requirements and the associated costs. Credit cards for students are thus being tailored according to such needs. Credit cards for students offer a range of benefits that make a student’s life much simpler and significantly less hassle.

The MNSSBY Scheme helps students pay college fees, similar to other credit cards students can get. However, even as we move on from the question as to can a student get a credit card, we move into the bigger question of how students can best use their credit card. Student credit card schemes such as the MNSSBY enable students to get loans and other benefits that students must carefully and judiciously use.

Read on to learn a few tips that you must keep in mind even as you avail the different credit cards students can get.

1. Understand your Credit Profile

Having and using a credit card significantly impacts your credit profile, which will further impact the other cards for students you can avail of. Based on your spending and repayment, your credit profile will continuously change and it is important to remain vigilant of the same. Firstly, learn your credit score and then understand the different factors that will impact the score and how you can improve it too.

2. Analyse the different Credit Cards Students can get

It is important to know your options before you opt for a single credit card. To ensure that you get the best card for students available, browse through the options available to you. Different credit card companies offer different benefits and special offers for students, and it is important to learn which will work best for your requirements. Depending on the use you have for the card, you should be able to identify student credit cards online that meet your specific requirement.

3. Learn about Card features to Avoid

While a credit card offers several advantages and benefits to its customers, there are also several features that you must ideally avoid opting for. For instance, some credit cards offer rewards that may seem appealing at first but they also come with a binding agreement that you are required to pay off your dues on a monthly basis to avail of these rewards. As a student, if you are unsure of whether you will be able to repay all your expenditure on a monthly basis, it is best to avoid cards that bank on that to offer you rewards.

4. Pick the best Interest Rates

All credit cards come with an interest rate on your spending, but the rate of interest differs from card to card. This is one criterion that you may want to spend some time browsing as you look for student credit cards online. The rate of interest will define how expensive it is for you to repay your bills and the amount that you have spent via the credit card.

If your rate of interest is very high, it will become quite difficult for you to repay your spending in time. It is best to look for the lowest rate of interest available in the market, as this way you can curtail the amount you pay for using the credit card. Even while browsing through student credit cards online, check for offers on Finserv MARKETS, where you may be able to avail of offers specially crafted for you.

5. Make timely Payments

While availing of a credit card, you will be able to decide on the frequency of payments you will be making on your credit card. Regardless of the frequency you pick, make sure to make these payments then. Not making your payments in a timely manner will severely impact your credit score and could also result in you being unable to avail of a fresh credit card, even later in life. Opt for a repayment frequency that is easy for you to manage, and make sure to make those payments in time.

Credit cards for students are a great tool to manage their finances comfortably. However, it is also important to remember that a credit card must be used responsibly. Student credit card schemes such as the MNSSBY, which offer student credit cards, are rapidly gaining popularity as they allow students to manage their finances themselves, and ensure accountability.

Hurry!! If you don’t have a credit card yet, then apply for a credit card today!!

Should You Start a Business When You Have Debt?

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Many people today want to have their own business. Unfortunately, they may also have a crippling amount of debt in the form of student loans. The good news is that you don’t have to give up on your dream. Even with student debt, you can still create a successful business.

Facilitating the Process

There are a few things you can do to make the process easier. For instance, consider deferment and forbearance. It’s a good idea to know how they affect your debt from school. Forbearance lets you quit making payments on a loan for as long as a year. Just remember that interest might continue accruing. Deferments are similar since you won’t have to make payments on your loans. However, you usually have to meet a few requirements first, such as being unemployed or being enrolled in school. Since deferment may affect your credit, you can still take out a loan for your small business if you go this route. It will show up on a credit report, but it will be neither good nor bad. Just remember that it’s best to apply for deferment before your financial situation declines, so you don’t miss a payment.

Getting Startup Funds When You Have Debt

Many times, startups need an initial investment so they can get started. The money is designed to cover the cost of equipment, employees, space, and other needs. The initial investment also allows employees to be paid before the company begins to pull in money. Of course, marketing to start generating sales also costs money. Even if you can create a careful budget, you’ll still need some funds, whether in the form of a small business loan from a bank or help from friends. Companies will eventually have a business credit score. However, in the beginning, whether or not you get a loan depends on your personal score. That’s another reason to ensure you take care of your student debt first.

Reducing Your Student Loans

If you have a good credit score and want to get your loans paid off faster, consider refinancing. If you get a lower interest rate, you won’t pay as much in the long run. The process involves taking a new loan out to pay off the current one. Often, the new one comes with a lower interest rate, especially if your credit is better now than when you were in school. It’s best to calculate how much you expect to save before you choose any one lender. That way, you can maximize your savings.

If you have federal student loans, you may have more options open to you. For instance, if you do not want to have to pay as much each month, look into an income-based repayment plan. The amount you send each month is based on how much you are earning. If you do not have a high income in the early stages of your business, you might not have to pay very much on your debt. Just remember that the interest continues to accrue.

Pros and Cons of Refinancing Student Loans

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A college education is expensive, especially if you live in the USA. This is exactly why over 60% of the students graduate from college with a debt of over $35,000, as reported for the year 2019. The debt is even higher for some students, who either switched colleges or changed their majors.

With such a large piece of debt hanging over your head, you need to take some time out to plan to make money to do the repayment, to make it easier on you.

Now, the repayment of this debt is easier if you have a single student loan on your head. However, most of the time, that’s not the case. Most of the time, the federal loan is not sufficient to cover your entire college education.

You will then have to resort to lending bodies, banks or other forms of private lenders to cover the expenses for your remaining semesters in college.

The need for Student Loan Consolidation

This means you’ll be dealing with a number of different types of loan debts instead of just one, which makes the repayments quite confusing. One of the solutions to streamline the repayments of your debts is to apply for student loan refinancing.

However, before actually deciding to go ahead and try it, it is better to do some research and figure out if it’s really going to be beneficial or not, especially since once you have applied for it, there’s no going back.

What is Student Loan Consolidation?

Instead of repaying typically 8 to 10 debts with different interest rates and due dates, many choose to consolidate these loans into a single big loan so that they have to pay a single amount each month to a single lending body.

Not only does the technique make the repayments easier, but it can also sometimes cost you less than the sum of original repayments.

However, whether or not student loan refinancing is the right option for you depends upon a number of factors including the nature of each of the loans, benefits and your present finances.

Advantages and Disadvantages of Student Loan Consolidation

Let’s dig a little deeper into the advantages and disadvantages of consolidating student loans to decide if it’s beneficial or not in the borrower’s specific scenario:

Student Loan Refinancing Pros

  • The biggest reason for a student loan consolidation is a single monthly payment with a single interest rate rather than multiple. It will save you from much trouble in keeping track of payments and also from making defaults, as is typically the case with individual repayments.
  • A variety of refinancing plans is available spanning over 10 to 30 years. If you choose longer plans, you will be making smaller monthly payments. This makes student loan consolidation more affordable for most borrowers.
  • You have the option of consolidating any number and amount of individual loans, without the presence of any minimum or maximum threshold. This qualifies all students for a student consolidation plan.
  • Automatic repayments of the debt are possible to further release you of the trouble of keeping track of the monthly debit from your bank account. 

Student Loan Refinancing Cons

  • You might be paying more interest over your student loan, especially if you choose plans spanning over a greater period of time.
  • Refinancing plans apply the weighted average over all your individual student loan interest rates to determine the final interest rate. This may end up being higher than the simple average of all the interest rates, especially if few of the sizeable loans have larger interest rates.
  • Through student loan consolidation, some borrower benefits may be lost, that might be available on individual student loan plans.

Loans for Students Who Are Unemployed

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Everybody is not lucky enough to all the facilities to make their dreams come true. They have to make situations according to them. There are many students who did not have a strong family background; had to suffer a lot because of a money crisis.

But now, everybody can feel like the king of the world. Unemployed students who do not have enough to spend on their higher studies can borrow without any difficulty. And they can make their dreams come true of studying further without doing any part-time job.

Loan Laws for Students in UK

The Government of United Kingdom through the student Loan Company SLC provides loans for Students who are unemployed. Student Loan Company is a non-departmental public body that is responsible for Student Finance England and Student Finance Wales. Unemployed students can apply for tuition fee and maintenance loans to pay for course fees and living costs.

No matter where in the UK you attend university, The Student Loans Company manages all British student needs. You can get extra money in form of Student Loan to pay for university or college tuition fees and to help with living costs. You start repaying 9% of your earnings above a certain income.

The best part it, monthly installments of your student loan will depend on how much you earn, not what you owe.

Loan System for UK’s Students

British student loan is administered by the Student Loan Company. In the UK, when you want to take out a student loan, you deal with the student finance body for the nation where you originally live – England, Northern Ireland, Scotland or Wales. It is not like a commercial loan.

Unemployed Student Loans are of three types;

  1. Government student loans for unemployed
  2. Parent-student loans for unemployed
  3. Private Student loans for unemployed

Rate of interest is different for these three types of loans for students. Rate of interest for government unemployed student loans is comparatively low as compare to other two types.

Eligibility

There are two eligibility criterions to meet the student loan requirements: one is personal eligibility and the other is course or institution eligibility.

Personal eligibility criterion concerns the student’s residency status.

Course/ Institution eligibility criterion is that student must be studying for an undergraduate degree at a UK degree awarding institution or other verified higher education institution.

In addition, students aged less than 60 years studying for a postgraduate taught Masters at a UK degree-awarding institution or other verified HEI or students on some teacher, youth and community worker courses are also eligible for SLC support and for a £10,000 student loan.

How much Does Tuition Fee Loan?

Loan covers the cost of your course fees. The publicly-funded universities and colleges are currently charging students annually £9,250. These universities and educational institutes charge you according to your residential address and where you’d like to study.

If you live in Northern Ireland, Scotland and Wales, then you can apply for a tuition fee loan to nation’s student finance agency which may cover some or all of your tuition fee costs. And it is up to you whether you apply for a tuition fee loan to cover the full cost of your undergraduate course in a publicly-funded institution or some of your tuition fee.

Student Finance Agency will transfer tuition fee loans directly to your universities or college and not to your bank account. And you have to pay it back once you finished your studies and start earning above a certain amount.

Full-time students can get loans of £9,250 and full-time students at a private university or college can get £6,165 for the academic years 2017-2018, 2018-2019 & 2019-2020 and onwards.

Maintenance Loan

Maintenance loan is the loan to cover your living costs while studying. UK domiciled Students who are eligible for tuition fee loan are also entitled to a maintenance loan, which is designed to help pay for living costs whilst at the university.

Maintenance loan is a set amount for all students. Students at home are entitled to less and those living away from home in London entitled to more amount of maintenance loan.

Repayment of Student loan along with any maintenance loans will be started your graduation or once you have completed your studies.

And you start earning above a certain amount.

Tuition Fee Loan for Part-time Students

If your course has a course intensity of 25% or more then you are eligible to apply for. You can check the intensity of course with your university or college. If you are eligible then you can apply for a tuition fee loan of up to £6,935 per year.

Tuition Fee Loan for Postgraduate Master’s Students

If your age is 59 years or under and you are planning to study a postgraduate master’s degree, you might be eligible to receive a loan of up to £10,609 to contribute to your course and living costs.

You’ll only make repayments of the loan when you earn over the salary threshold, which is currently £21,000 annually.

Repayment of Unemployed Student Loan; How and When

The students will be eligible to start repayments in April after they have finished or left their course. The government has set repayment threshold. A repayment threshold is a minimum income that you will have to earn before you begin to repay your student loan.

RepaymentEngland
& Wales		Northern Ireland
& Scotland
Annual income£25,725£18,935
Monthly income£2,143 £1,578
Weekly income£494 £364

The Scottish Government has shown their commitment to raising the repayment threshold. The Scottish Government will raise it for the students from Scotland to £25,000 from April 2021.

For more information, see the Student Loans Company website for information about loan repayment.

When you start earning and reach the repayment threshold, you will pay 9% of your income. Income includes earnings from employment, self-employment, rental income, earning from savings interest, pensions or from investments, this would count as part of your income.

EmploymentRepayment
Employed in
UK		– If you are employed in the UK then
your repayment will be collected through PAYE
– HM Revenue and Customs makes the
calculations and deducts the repayment from
your gross pay with your income tax
– It is your responsibility to inform your
employer that you are due to repay a student loan
Self-employed– If you are self-employed, so you will have to
budget for your student loan repayment
– Set money aside as the Student Loan Company
cannot accept payments by credit card
– You may have to deposit money as a
direct debit to a saving account and repayments
will be collected through the tax
self-assessment system
Leaving
Country
for more
than three
months		In this case, you have to inform the
Student Loan Company. The earning
threshold differs for overseas countries

There are possibilities that a person could not repay the loan in full 30 years after his first payment, the remaining balance will be written off.

For Further Information

For more information on grants, loans, and other financial support available for undergraduate, part-time or postgraduate students, or for special needs students contact to student support services in your college or university or speak to an adviser.

You can also contact your country’s student finance agency